1934 CONGRESSIONAL RECORD-SENATE 5827 3443. Also, petition of the Italian Chamber of Commerce Mr. LEWIS. I desire to announce the absence of the in New York urging favorable consideration of House bill Senator from North Carolina [Mr. BAILEY] on business of 8430; to the Committee on Ways and Means. necessity; the absence of the Senator from Ohio [Mr. 3444. Also, petition of the Greenpoint Metallic Bed Co., BULKLEY], I may say, out of domestic necessity; the absence Inc., Brooklyn, N.Y., opposing the enactment of the Wag­ of the Senator from Florida [Mr. TRAMMELL] and that of ner-Connery bills; to the Committee on Labor. the Senator from Mississippi [Mr. STEPHENS] and the Sen­ 3445. Also, petition of J. & J. Cash, Inc., South Norwalk, ator from Louisiana [Mr. LoNG], occa.sioned by necessity. Conn., opposing the Wagner-Connery bills; to the Commit­ I regret to announce that the Senator from Montana tee on Labor. [Mr. WHEELER] is detained from the Senate on account of 3446. Also, petition of the New York State Bankers' As­ illness. sociation, New York City, favoring the passage of Senate I ask that this announcement stand for the day. bill 3025; to the Committee on Banking and CUrrency. Mr. HEBERT. I desire to announce that the Senator 3447. Also, petition of the G. R .. Kinney Co., New York from West Virginia [Mr. HATFIELD] is necessarily detained City, opposing passage of the Fletcher-Rayburn stock ex­ from the Senate. change control bill; to the Committee on Interstate and The VICE PRESIDENT. Eighty-seven Senators have an­ Foreign Commerce. swered to their names. A quorum is present. 3448. Also, petition of the Allied Printing Trades Council ONE HUNDREDTH ANNIVERSARY OF THE DEATH OF GENERAL of Greater New Yor~ favoring passage of the Wagner in­ LAFAYETTE-SPECIAL COMMITTEE dustrial disputes' bill; to the Committee on Labor. The VICE PRESIDENT. The Chair, under the authority 3449. By Mr. SMITH of West Virginia: Resolution of the Parkersburg Board of Commerce, Parkersburg, W.Va., of House Concurrent Resolution No. 26, appoints the Sen­ ator from Virginia [Mr. BYRD], the Senator from Arkansas protesting against the enactment of House bill 8423 and [Mr. ROBINSON], the Senator from Kentucky [Mr. BARKLEY], Senate bill 2926, known as the " Wagner-Connery bills "; to the Committee on Labor. the Senator from Ohio [Mr. FEssl, and the Senator from New Jersey [Mr. KEANJ as members on the part of the Sen­ 3450. By Mr. SNELL: Petition of the New York Telephone Co. employees relative to Wagner labor disputes' bill; to ate of the special congressional committee to make appro­ the Committee on Labor. priate arrangements for the commemoration of the one hundredth anniversary of the death of General Lafayette. 3451. Also, petition signed by employees of Algonquin Paper Corporation, of Ogdensbµrg, N.Y., for the Federal JOHN A. DONAHUE Government to enact immediate legislation that will protect As in executive session, the paper industry of this country against foreign impor­ The VICE PRESIDENT. The Chair lays before the Sen­ tations; to the Committee on Ways and Means. ate a message from the President of the United States, to 3452. By Mr. SUTPHIN: Petition of the Highway Com­ which he invites the attention of the Senator from Arkan­ mission of the State of New Jersey, urging consideration by sas [Mr. ROBINSON]. Congress of the Cartwright road bill; to the Committee on The legislative clerk read as follows: Roads. 3453. By the SPEAKER: Petition of Percapio Master et al., To the Senate: of Koloa Kauia, T.H., re Philippine independence; to the In compliance with the request of the Senate of March Committee on Insular Affairs. 29, 1934, I return herewith the resolution of the Senate of 3454. Also, petition of numerous citizens of Hawaii re February 20, 1934, advising and consenting to the appoint­ Philippine independence; to the Committee on Insular ment of John A. Donahue to be postmaster at New­ Affairs. burgh, N.Y. FRANKLIN D. ROOSEVELT. SENATE THE WmTE HousE, April 2. 1934. Mr. ROBINSON of Arkansas. I move that the confirma­ MONDAY, APRIL 2, 1934 tion of the nomination be reconsidered, and that the mes­ (Legislative day of Wednesday, Mar. 28, 1934> sage and nomination be referred to the Committee on Post Offices and Post Roads. The Senate met at 12 o'clock meridian, on the expiration of the recess. The motion was agreed to. MESSAGES FROM THE PRESmENT PETITIONS AND MEMORIALS Messages in writing from the President of the United The VICE PRESIDENT laid before the Senate the peti­ States were communicated to the Senate by Mr. Latta, one tion of Local Union No. 6846, United Mine Workers of of his secretaries. America, of Chicora, Pa., praying for the passage of Senate CALL OF THE ROLL bill 2926, providing for the settlement of disputes between Mr. LEWIS. I suggest the absence of a quorum, and ask employers and employees and to establish a national labor for a roll call. board, which was ref erred to the Committee on Education The VICE PRESIDENT. The clerk will call the roll. and Labor. The legislative clerk called the roll, and the following He also laid before the Senate a resolution adopted by the Senators answered to their names: Architectural Guild of America favoring the passage of leg­ Adams Couzens Kean Reed islation providing a 30-hour work week for industry and Ashurst Davis Keyes Reynolds legislation providing for the settlement of disputes between Austin Dickinson King Robinson, Ark. Bachman Dieterich La Follette Robinson, Ind. employers and employees and to establish a national labor Bankhead Dill Lewis Russell board, which was referred to the Committee on Education Barbour Duffy Logan Schall and Labor. Barkley Erickson Lonergan Sheppard Black Fess McAdoo Shlpstead He also laid before the Senate a resolution adopted by the Bone Fletcher McCarran Smith Manufacturers' Association of Lancaster, Pa., and a telegram Borah Frazier McGill Steiwer Brown George McKellar Thomas, Okla.. from the Oil Well Supply Co., of Dallas, Tex., protesting Bulow Gibson McNary Thomas, Utah against the passage of legislation providing for the settle­ Byrd Glass Metcalf Thompson ment of disputes between employers and employees and to Byrnes Goldsborough Murphy Townsend Capper Gore Neely Tydings establish a national labor board, which were referred to Caraway Hale Norris Vandenberg the Committee on Education and Labor. Carey Harrison Nye VanNuys Clark Hastings O'Mahoney Wagner He also laid before the Senate a resolution adopted by Connally Hatch Overton Walcott the Medical Round Table, of Chicago, Ill., favoring relief Coolidge Hayden Patterson Walsh Copeland Hebert Pittman White of physicians by setting up a system whereby their debtors Costigan Johnson Pope may arrange long-term credits upon obligations discounted 5828 CONGRESSIONAL RECORD-SENATE APRIL 2 at a low rate of interest by a Federal agency, which was re­ He also presented the memorial of L. H. Davenport, of ferred to the Committee on Banking and Currency. Enocks, Tex., remonstrating against the passage of legisla­ He also laid before the Senate telegrams in the nature tion relating to the cotton industry, which was ordered to of memorials from Webb Hilbert, of Katonah, and William lie on the table. P. Willetts, of Roslyn Heights, in the State of New York, Mr. CAPPER presented petitions numerously signed of remonstrating against the enactment of proposed legislation sundry citizens of Greenwich and Leavenworth, in the State to regulate stock exchanges, which were referred to the of Kansas, praying for the passage of legislation providing Committee on Banking and Currency. for the prompt payment of the so-called " soldiers' bonus ", He also laid before the Senate the memorial of Charles which were refeITed to the Committee on Finance. Muller, of New York City, remonstrating against the enact­ Mr. TYDINGS presented a memorial of sundry citizens ment of legislation providing for unconditional citizenship of Baltimore, Md., remonstrating against the passage of the to Prof. Albert Einstein, which was referred to the Com­ so-called "Fletcher-Rayburn stock-exchange control bill", mittee on Immigration. which was referred to the Committee on Banking and He also laid before the Senate telegrams from the speaker Currency. of the House of Representatives of the Territory of Hawaii He also presented a resolution adopted by the Woman's and from civic, business, and other organizations of Hawaii, Christian Temperance Union of Reisterstown, Md., favor­ remonstrating against the enactment of proposed legisla­ ing the passage of the so-called "Patman motion-picture tion providing for a processing tax on sugar and the licens­ bill", being House bill 6097, providing higher moral stand­ ing of refiners, importers, and handlers of sugar on a quota ards for films entering interstate and foreign commerce, basis as affecting the Territory of Hawaii, which were re­ which was referred to the Committee on Interstate Com­ ferred to the Committee on Finance. merce. He also laid before the Senate a paper in the nature of a RELIEF OF DEPOSITORS IN CLOSED NATIONAL BANKS memorial from Mrs. Maude Mary Forrest, of Washington, Mr. BARBOUR. Mr. President, I ask unanimous consent D.C., remonstrating against the entrance of the United to have printed in full in the CONGRESSIONAL RECORD resolu­ states into the League of Nations and the World Court, tions adopted by the Board of Commissioners of the City of which was referred to the Committee on Foreign Relations. Atlantic City, N.J., urging enactment of the McLeod bill, for He also laid before the Senate a resolution adopted by the the relief of depositors in closed national banks. recent Western Governors' Conference in Salt Lake City, There being no objection, the resolutions were referred to Utah, recommending that the United States Government the Committee on Banking and Currency and ordered to be acquire at fair prices and by suitable financing such por­ printed in the RECORD, as follows: tion of the surplus stock of the important indestructible CITY OF ATLANTIC CITY, nonferrous metals, useful for munitions, as will be neces­ DEPARTMENT OF PUBLIC AFFAIRS. sary to bring about an increase in mining activity and re­ I, Bertram E. Whitman, city clerk of the city of Atlantic City, employment, which was referred to the Committee on Mines in the county of Atlantic, State of New Jersey, do hereby certify that the following is a true copy of a resolution which was passed and Mining. by the Board of Commissioners of the City of Atlantic City at a He also laid before the Senate a resolution adopted by the regular meeting held March 29, 1934, as taken from the original recent Western Governors' Conference in Salt Lake City, on file in the otnce of the city clerk. Utah, favoring leaving the subject of public-domain admin­ In testimony whereof, I have hereunto set my hand and affixed the official seal of the city of Atlantic City this 31st day of March, istration to the respective legislatures of the public-land 1934. States, which was referred to the Committee on Public {SEAL] BERTRAM E. WHITMAN, Lands and Surveys. City Clerk. He also laid before the Senate a resolution adopted by the Regular meeting of the board of commissioners held March 29, recent Western Governors' Conference in Salt Lake City, 1934, Mayor Bacharach presiding. Present: Messrs. Bacharach, Casey, CUthbert, Kuehnle, and Pax­ urging the recognition and reestablishment of silver as a son, 5. Absent, 0. primary money metal, and the establishment and mainte­ Commissioners of Atlantic City record their favor of the passage nance of a stable and equitable regulated relationship be­ of the McLeod b111 by the United States Congress. "Be it resolved by the Board of Commissioners of the City of tween gold and silver, which was referred to the Committee Atlantic City, That we do hereby go on record in favor of the pas­ on Banking and Currency. sage by the Congress of the United States of the McLeod b111, He also laid before the Senate a resolution adopted by the which provides for Government purchase of remaining assets in recent Western Governors' Conference in Salt Lake City, closed national banks, payment of depositors in full, and liquida­ tion of the assets over a 10-year period; be it further favoring the appropriation of additional funds for emer­ "Resolved, That a copy of this resolution be sent to the Presi­ gency highway construction, which was referred to the Com­ dent of the United States, to the two Senators from New Jersey, mittee on Post Offices and Post Roads. and to the Congressman from our district." Upon motion of Mayor Bacharach this resolution was adopted by He also laid before the Senate a resolution adopted by the the following vote: Ayes, Messrs. Bacharach, Casey, Cuthbert, recent Western Governors' Conference in Salt Lake City, Kuehnle, and Paxson, 5. Nays, 0. Utah, favoring the continuation of the annual appropriation of $125,000,000 for Federal highway construction, which was REPORTS OF COMMITTEES referred to the Committee on Post Offices and Post Roads. Mr. SHEPPARD, from the Committee on Commerce, to He also laid before the Senate a resolution adopted by the which were referred the following bills, reported them sev­ athletic committee of the Dayton (Ohio) Chamber of Com­ erally without amendment and submitted reports thereon: merce, favoring the repeal of the admission tax as applied S. 2334. An act authorizing the city of Atchison, Kans., to colleges and universities, which was ordered to lie on the and the county of Buchanan, Mo., or either of them, or the table. States of Kansas and Missouri, or either of them, or the He also laid before the Senate a memorial of citizens of highway departments of such States, acting jointly or sev­ the State of Ohio, remonstrating against the enactment of erally, to construct, maintain, and operate a free highway proposed legislation to regulate the manufacture and sale of bridge across the Missouri River at or near Atchison, Kans. foods, drugs, and cosmetics, and to prevent the false adver­ relating to the appointment of Commis­ Bills were introduced, read the first time, and. by unani­ sioners of the District of Columbia; to the Committee on the mous consent, the second time, and referred as follows: District of Columbia. By Mr. TYDINGS: By Mr. REED: A bill CS. 3238) for the relief of Howard E. Tolson; to the A bill

By Mr. ~AGNER: The legislative clerk read the concurrent resolution CS.Con. A bill CS. 3262) granting a pension to William H. Bruns; Res. 12), as follows: to the Committee on Pensions. Resolved, etc., That the action o! the Vice President and of the By Mr. McKELLA."J=?.: Speaker of the House of Representatives in signing the enrolled bill (S. 2729) entitled "An act to repeal an act of Congress entitled A bill CS. 3263) to repeal certain provisions of section 114 'An act to prohibit the manufacture or sale of alcoholic liquors of the Revenue Act of 1932; to the Committee on Finance. in the Territory of Alaska, and for other purposes ', approved By Mr. COPELAND: February 14, 1917, and for other purposes", be rescinded, and that (S. in the reenrollment of such bill the last proviso of section 1 reading A bill 3264) for the relief of Muriel Crichton; to the as follows: "Provided, That the Governor of the Territory o! Committee on Claims. Alaska, from and after the passage and approval of this act, shall A bill CS. 3265) creating the World War Memorial Com­ have the power and authority to grant pardons to persons there- . tofore convicted of violations of the aforesaid act of February 14, mission, and providing for the erection in Washington of a 1917.", be stricken out. memorial to the soldiers, sailors, and marines of the United States who lost their lives in the World War; to the Com­ The VICE PRESIDENT. Is there objection to the present mittee on the Library. consideration of the concurrent resolution? By Mr. DILL (by request): There being no objection, the concurrent resolution was A bill CS. 3266) to amend the Railway Labor Act approved considered and agreed to. May 20, 1926, and to provide for the prompt disposition of THE TARIFF-ORIENTAL COMPETITION disputes between carriers and their employees; to the Com­ Mr. HEBERT. Mr. President, I send to the desk and ask mittee on Interstate Commerce. to have inserted in the RECORD a translation of a report and By Mr. SCHALL: resolution of the Chamber of Commerce of Lyons, France, in A bill CS. 3267) for the relief of John F. Cain; to the Com­ relation to oriental competition. I do this because of the mittee on Claims. bearing which it has upon pending changes in the tariff law. By Mr. MURPHY: There being no objection, the matter was ordered to be A bill CS. 3268) for the relief of William T. Roche; to the printed in the RECORD, as follows: Committee on Claims. [From the Vlomen's Wear, Mar. 28, 1934) A bill CS. 3269) relating to the construction, maintenance, FRENCH WARNED JAPANESE TEXTILE COMPETITION Is A LIFE OR DEATH TRADE THREAT--MOREL-JOURNEL REPORT OF REMARKABLE and operation by the city of Davenport, Iowa, of a bridge POWER LOOM ADVANCES AND 0rHER ADVANTAGES RESULTS IN RESO• across the Mississippi River at or near Tenth Street in LUTION URGING DRASTIC IMPORT RESTRICTIONS Bettendorf, State of Iowa; to the Committee on Commerce. Demanding that importe~ Japanese manufactured products be restricted to the average obtaining for the 3-year period from AMENDMENTS TO THE REVENUE BILL 1929 to 1932, the chamber of commerce of Lyons, France, acting :Mr. SHIPSTEAD, Mr. LA FOLLETTE, and Mr. MURPHY on a report submitted by its president, Henri Morel-Journel, passed a resolution containing this and other demands, sending each submitted an amendment intended to be proposed by a copy of both the report and the resolution to the French Gov­ them, respectively, to House bill 7835, the revenue bill, which ernment. were severally ordered to lie on the table and to be printed. A translation of the report and the resolution has just reached this market and in full is as follows: AMENDUENT TO LEGISLATIVE APPROPRIATION BILL "The question of Japanese competition has become really a question of life or death for many of our industries. In today's Mr. WAGNER submitted an amendment intended to be pro­ confusion our attention has been so completely absorbed by the posed by him to House bill 8817, the legislative appropriation dangers of internal trouble, especially financial trouble, that we bill, which was ordered to lie on the table and to be printed, have not, unfortunately, given first place in our thoughts to the competition from Japan. The situation is so serious, and it has as follows: been remedied up until now so incompletely that it is urgent On page 41, at the end of section 3, to insert a new section, that public opinion be aroused and that the Government be ex­ as follows: horted to undertake strong, immediate action. "SEC. 4. Each contractor or Government agency doing force­ "To believe that Japan has been dumping abroad is an error; account work on any project or projects financed In part or in the situation is more serious, for it is a question of exporting whole by funds appropriated by an act of Congress, shall report at prices which for the most part are normal for the manufacturer, monthly, and cause every subcontractor to report in like man­ although they may appear to us to be abnormal. ner, to the United States Department of Labor, on forms to be CITES LABOR ADVANTAGES furnished by such department, the number of persons on its pay "The Japanese manufacturer actually benefits by: rolls, the aggregate amount of such pay rolls, the man-hours "1. A good supply of labor, Japan having twice as many inhab­ worked, and the total expenditures for materials. Each such con­ itants per square mile as has France, and its population of tractor or Government agency shall also furnish to the Dapartment 69,000,000 increasing at the rate of 1,000,000 a year. of Labor the names and addresses of all subcontractors on the "2. Labor which is skillful, diligent, disciplined, and sober, which work at the earliest date possible." with lower wages has a wholesome standard of living which is satisfactory to it. CHANGE OF REFER.ENCE "3. Vlages which have recently been increased-although lag­ On motion of Mr. SHIPSTEAD, the Committee on Education ging a year behind the devaluation of the yen-but which are still, all other benefits considered, 20 to 40 percent below ours for and Labor was discharged from the further consideration of working hours 10 to 20 percent longer. the bill iecial effort to make of us-part of the life of this Nation. Millions are today repeating this radio broadcast today an outstanding event of the year. Mr. his words, his wisdom, and sharing his courage. Millions have Simpson thought a great deal of you, Frank. I am sure the radio drunk deep from the fountain of his knowledge. This Nation is audience joins in expressing their deep appreciation, and I wish a better place to live in and is safer because of the life of John A. to do so personally and on behalf of the National Farmers Union. Simpson. We thank you and all the N .B.C. folks. Farmers of this Nation-you 30,000,000 men, women, and chil­ I sincerely hope that all the listeners of today will be with us dren who live on the farms-and all friends of liberty, may we not again on April 28 at this same hour. I expect to greet you again call upon you to pledge anew that you will carry on the work of at that time. John A. Simpson until there is a more equal and just distribution of the wealth of this Nation, until justice triumphs; that you will MONETARY USE OF SILVER not permit to be established in this Nation a feudal system-a Mr. CONNALLY. Mr. President, I ask unanimous con­ system which would make feudal serfs out of tillers of the soil and lords and barons in the departments in Washington. sent to have printed in the RECORD an article on proposed In conclusion, may I say 1Jlat we will carry on the unfinished silver legislation appearing in the New York Times of March work of our departed friend; that we feel as if in his living 25, 1934, and also an article dealing with the same subject presence is the coming of a new era, of a new civilization-a civ­ ilization in keeping with the teachings of the Nazarene. appearing in the Washington Herald of March 25, 1934. Mr. BAER. John Simpson died as he lived-on the firing line. There being no objection, the articles were ordered to be He was always in the front-line trenches in the battle for human printed in the RECORD, as follows: progress. Up to the last minute he was fighting for genuine [From the New York Times, Mar. 25, 1934] measures to relieve our distressed agriculture. The untimely death of this greatest of all progressive farm leaders will be a great loss BENEFIT TO COTTON SEEN IN DIES BILL-PLAN TO INCREASE OUR to the American farmers. ?Y.1ARKET ABROAD FOR SURPLUS CROPS ENCOURAGES 8UPPORT-0PPO• John Simpson believed that the workers on the farms and in SITION Is ExPECTED--lNFLATIONARY CHARACTER OF SILVER PROGRAM the factories should have a greater share of the wealth which REGARDED AS CONTROVERSIAL they produced. His plan was to establish a new and scientific The cotton trade is much interested in the Dies silver bill, which system of marketing which would eliminate many unnecessary passed the House of Representatives last week and on which public intermediaries and allow the farmers through their own coopera­ hearings are expected to start before the Senate Agricultural Com­ tive marketing associations to fix a just price based upon the mittee this week. The consensus is that enactment of the bill cost of production. With his excellent education and his thor­ would benefit cotton more than any other agricultural product, ough business training, coupled with his successful experience since the surplus is large and cotton is the chief export agri?ul­ he had had in his own State of Oklahoma., John Simpson would tural product of the United States. The Dies measurie provides have been the ideal man to head such a gigantic undertaking. for the acceptance at a premium of foreign silver for American He has, however, richly endowed us with his principles and ideals, surplus agricultural products. and it is our duty to enter into his fighting spirit and carry on Since the Dies measure provides that the silver received in pay­ his practical program. ment for agricultural surpluses shall be deposited with the Secre- 1934 CONGRESSIONAL RECORD-SENATE 5837 tary of the Treasury, who shall issue sUver certificates against silver regain his former advantage, many believe it necessary for the received the bill is considered inflationary in character. For this Federal Government to aid in the disposal of farm products abroad. reason ~ppos i tion to it ts e:i..-pected at the hearings before the Senate committee. In view of the claims of its sponsors that the plan will dispose of surplus agricultural products without resorti.ng [From the Washington Herald, Mar. 25, 1934) to curtailment of production, there is in some quarters consid­ IMPORTANT LEGISLATION erable support for the measure as the lesser of the evils. By Robert H. Hemphill, financial authority As the measure provides for the creation of a board composed The Dies silver bill, which passed the House March 19 by a vote of the President, the Secretary of the Treasury, the Secretary of of 258 to 112, provides for the sale of surplus agricultural products Commerce, and the Secret ary of Agriculture to carry ~ut its pro­ to foreign countries in return for payment in silver at not. less than visions and as this board will have more or less discretionary 10 percent nor more than 25 percent above the world silver price. power, 'the feeling is that in the event of its enactment it will be The silver will be taken by the Treasury, which will issue silver operat ed on a basis where the monetary syst em of the country certificates for the full purchase value. With these certificates wm not seriously be interfered with. Opponents of the. bill are payment for these surplus products will be made to the farmer. not so sure of this and fear that the demands from the agricultural To assure stability, the bill provides for the redemption of these sections may be such that for political reasons or otherwise the certificates at the option of the monetary board, also created by board may embark on a heavy program of exchanging agricultural the bill, and consisting of the President, Secretary of the Treas­ products for silver in foreign markets. This, they maintain, will ury, Secretary of Commerce, and Secretary of Agriculture, at their in time result in a further serious disturbance to our monetary face value in silver, as measured in terms of gold. system. Therefore this money will ba redeemable in the equivalent of ECONOMY SEEN IN PLAN gold and in fact, might be redeemable in gold at the option of the It also is provided in the bill that the amount of premium Treasurer of the United States. These certificates will become lawful money of the United States, or excess above the world-market price which the board is author­ and as such, will be legal for bank reserves and receivable for all ized to agree to as payment for the products sold to foreign buyers public or private debts, being full legal tender. shall not"' exceed $400,000,000 a year. Thus, it is pointed out, the loss to the Federal Government on such a venture other than the The total amount of silver which may be received in payment inflationary feature of the act, will not exceed $400,000,000 a year. for surplus agricultural products, assuming the maximum of 25 percent above the world price is always paid, wm be $1,600,000,000 If the expenditure of that sum for the disposal of surplus agricul­ annually, for the 3 years which the bill is apparently designed to tural products abroad would elim1nate processing taxes and other operate. measures already 1n effect to restrict the production of ~gricul­ tural products in this country, the enactment of the Dies bill, How does this legislation affect you, l\!r. Average Citizen? Let's it ts contended, would be the best way of disposing of surplus analyze. Assuming that this bill is passed, and $1,600,000,000 of surplus farm products and by far the cheapest. farm products find a market in the silver countries, and that as a The bill further provides that silver taken in exchange for result $1,600,000,000 of new money is put into circulation in the agricultural products shall not exceed 25 percent above the world­ United States, it will increase the annual gross business of this market price for silver. On this basis, $2,000,000,000 in agricultural Nation $57,600,000,000. products could be sold abroad each year while the measure is in As there is an average of 12 intermediate transactions between effect, for which the Treasury would receive $1,600,000,000 in silver the production of the raw material and the finished product at the world-market price. At current quotations of around 45 delivered to the consumer, this amount of total transactions will cents an ounce for silver bullion, approximately 3,500,000,000 result in the creation and exchange between producer and con­ ounces of silver or almost one third of the silver reserves of the sumer of $4,800,000,000 of new wealth per annum, or to put it in world would be required yearly. This would result in a demand simpler words, will increase the national income (which means for silver, and the consensus is that the price would advance the aggregate of your income and mine and all t~e others of our sharply. 125.000.000 people) $4.800.000,000 per annum. The Dies bill is considered generally as a subsidy for agricultural As a side issue, the results of this bill will undoubtedly elevate products. Because of the provision that silver be accepted at a the world price of silver to fully absorb the premium which this premium of as much as 25 percent over the world price, it means Nation will undertake to pay. that surplus American agricultural products sold abroad will be It wm open up to our producers trading relations with 1,000,- 20 percent cheaper than in the domestic markets, if the full 000,000 people who have no gold with which to buy our products premium is allowed. The farmer, however, would receive the from whom we have been divorced since the shrewd manipulators domestic-market price, while the difference would be absorbed by of the Bank of England in 1873, by the judicious use of a slush the Federal Government. Some agricultural products, which are fund of £500,000 and aided by their satellites in this cou~try, selling above the world price, such as wheat, would be less in certain of our international bankers put over on the American demand than cotton, for which the domestic and foreign price Congress a fast one entitled "An act revising and amending the is virtually the same. laws relative to the mints, assay offices, and coinage of the United The enactment of the bill, it is contended, would put American States." agriculture on a parity with other countries. It is pointed out This act, whose real purpose was kept secret until the Congress that the cost of producing most crops in the United States because had adjourned and which four fifths of the House and Senate of higher prices for labor, taxes, machinery, and other items would understood to be an act relating solely to the operation of the be offset by such an act. mtnt--and providing a more scientific method of coining money, Because of the reduction of the gold content of the dollar to demonetized the standard silver dollar, which at that time was the 59.06 percent of its former parity, the current price of American favorite money of America. cotton in foreign markets is placed around 7 cents a pound at the To the students of finance, the gradual development of our old gold value of the dollar. The passage of the Dies bill. it is financial maturity furnishes hopeful assurance that perhaps within contended, would result in a further reduction of about 20 percent the near future we may succeed 1n divorcing ourselves from the in the price of cotton abroad. At present prices, cotton would be apron strings of the Anglo-American banking group who for 5 reduced to around Y:z cents a pound in gold on the old basis, 2 centuries, with diabolic cleverness and the assistance 01 a which, with the exception of one or two periods of short duration, misguided but tragically effective conservative press, have cUc­ is the lowest level at which American cotton ever sold abroad. tated and controlled our monetary system, and through it our This situation, it is believed, probably would discourage foreign economic development and destiny. growths of cotton. Consequently it would not be necessary to cur­ It is a sound bill, and proposes to issue sound money for our tail American production in order that cotton farmers would re­ surplus agricultural products, and this money when received by ceive a fair price. On the other hand, it is contended that without the farmer will be expended by him for the diversified products of the enactment of some such plan whereby the prices of American the Nation, and go into circulation passing from hand to hand cotton abroad can be kept in line with world economic conditions, 36 times per year in an endless chain of transaction by which we the drastic curtailment of production of cotton here will result in create and exchange goods and services. loss to the United States o! its dominant position in the world cotton market. Restricting cotton production here is to raise lt is a distinct, important, and substantial step towara recovery. prices, it is pointed out, and there is little doubt in the trade that RECTIFICATION OF RIO GRANDE-ADDRESS BY AMBASSADOR DANIELS production abroad would be increased approximately as much as production is decreased here. Mr. SHEPPARD. Mr. President, I ask permission to have Until a few years ago most American agricultural products could printed in the RECORD extracts from an address by Hon. compete in the world markets. At that time it was the American Josephus Daniels, American Ambassador to Mexico, in El manufacturer who could not compete with foreign-made goods. Paso, Tex., Saturday, March 17, 1934, at the celebration of As a result high import duties were levied on foreign manufactured goods to protect American industry. Consequently, it is pointed the adoption by the Mexican and Federal Governments of out, American industry has advanced to a high degree of ef­ the treaty for the rectification of the Rio Grande. ficiency, but at the same time prices of American goods, a large There being no objection, the matter was ordered to be part of which are consumed by agriculture, have been higher than manufactured articles in other countries. Because o! this farmers printed in the RECORD, as follows: 1n other countries, it is said, have an advantage over American I highly appreciate the honor done me by the chamber of com­ agricultural producers. In order that the American farmer may merce in its invitation to speak at the celebration of the adoption 5838 CONGRESSIONAL RECORD-SENATE APRIL 2 of the treaty for the rect1ftcation of the Rio Grande and the wel­ waves, devouring its own lower banks, earth, trees, and all, as come by the mayor of El Paso and om.eta.ls of the city and chamber though in a furious effort to carry away the whole country and upon my arrival here. This pleasure is heightened by the tender dump it into the sea." by the mayor and officials of the freedom of the city of Ciudad Indeed, Old Man River has insisted upon being a rugged indi­ .Juarez and the honors by the Twenty-fourth Cavalry under the vidualist, living a quiet life or going on a rampage, as suited his command of Col. Rodolfo Rivielo, of the Mexican Army, and by mood, without regard to the feelings of peoples or the rights of like receptions and military honors by Brig. Gen. Walter C. Short, property or the rules of society. Throughout the aeons he has of the American Army, commanding the increasingly important seemed to resent any attempt at controlled circulation or collec­ Army establishment at Fort Bliss, and by the cordial welcome by tive bargaining or any other social reform which in the least the residents of both cities. I rejoice to have a part in this cele­ affected his unrestrained comings and goings. The result of this bration, both as a citizen of the United States and as the Ambas­ meandering has been that one year he would with perfect dis­ sador to the country which has joined with my own country in regard of all titles and hereditaments made and provided cut agreement upon a tangible plan which is a real exemplification of across individual ownership or national integrity of territory, wan­ a. forward step essential to both countries. What I have seen in tonly, and merrily, and audaciously, without even saying " by my brief stay in Ciudad Juarez and El Paso today is evidence that your leave", remove large expanses of Texas territory and trans­ the practice of neighborliness is most keenly appreciated by those fer ranches bodily into the Republic of Mexico, and the next year who dwell on the border of these two sovereign Republics, where would change the channel so that Mexican haciendas would find its observance blesses every phase of private and public endeavor. themselves on the northern banks and in the domain of Uncle The concept of neighborliness by those living close together Sam. He has, without notice or regard for the wishes of denizens remains either a. vacuous theory, sterile and unproductive of any on either side of the banks, which the commissioners in 1848 real good, or, on the other hand, has breathed into it the life­ thought were permanent boundaries, made it impossible at times giving spark of actuality by zealous application in practice. Like for a man to know whether he was a Mexican or a son of the many other worthy ideals, this one, unhappily, sometimes remai~ more northern Republic. He is not at all friendly to any men but a shibboleth reposing, undisturbed by exercise, in the minds for a long period and is a menace to what man builds or plants in of men. There is every reason why the people of this continent, the valley. He has been a vagabond, so to speak, here today and animated, as they are, by the same fundamental desire-the desire gone tomorrow. Always, however, this itinerant nomad has been that the social order shall always guarantee for all men the great welcomed and loved because he carried fructification wherever he principles of liberty, of equality, and of justice-should find much decided to take up his abode. Refusing to be tamed, he has common ground for putting this principle into practice. Each has brought fertility and beauty to whatever place he has decided to much to contribute; each has much to learn froi:n the other. hang up his hat for a long or short stay. He has always seemed These two splendid, modern cities of El Paso and Juarez (almost to serve notice, however, that he was a rover, gathering the sweets a twin city), with their good schools, railroad and industrial facili­ of today in one terrain, and the next year, like an unfaithful ties, and the many other things which make for ur~an welfare, suitor, hurrying on to bestow his presence and affection elsewhere, supplying and being supplied by almost countless miles of sur­ or to abandon to grief any who had been endowed with his fugi~ rounding country both to the north and to _the south of the Rio tive love. In his youth he was an inconstant lover. In the meri­ Grande, with their potential- wealth of preciou~ metals and vast dian of his career he was not much improved. herds of cattle and flocks of sheep, have much m common. The time came when those who wished this merry rover well Both of the sister slopes of this pleasant valley, through the art and depended upon him for the waters which made possible the of irrigation, have seen the desert converted into a giver of good production of crops for food and raiment agreed that an end must things almost with a semblance of the magic of the bloom spring­ be made of his wanderings and frequent changes of affection, fol­ ing from the flower pot in the hand of the East Indian magician. lowed by disappointment and devastation. They said Old Man To these broad and fertile acres the fearsome threat of drought River must settle down and become a steady family man, staying is unknown. By the reservoiring of water against the time of by the hearthstone and making provision for his increasing need, the threat of drought, otherwise always present in t~e progeny. vac.raries of season and nature, has been stripped of much of its If Uncle Sam is his mother, seeing he comes from the womb da~ger. The banishing of the uncertainty of moisture by rain­ of Colorado, and Mr. Mexico is his father, seeing he needs the fall, and the resulting boon to the peoples of both banks of the Solomonic rod to keep him in order, the Governments of Mexico Rio Grande in this valley, serves as another and earlier example and the United States recognized they must act together, as of what may be done when good neighbors set out to solve their neither parent alone could lasso the philanderer. The mother common problems by a community of endeavor and purpose. had tried in the fastnesses of the mountains, where he issued I have always liked to visualize boundaries--whether municipal, forth on his Un.certain career. She learned to her sorrow that State, or international-not as lines of division or separation, but maternal love and pleadings were of little or no avail. The fa­ rather as lines by which neighboring peoples are joined. Indeed, ther, wearing a sombrero and attired in the garb of a parent who it is only the earnest and sincere application of such a concept by practices discipline, learned that not even the use of the Solomonic both national principals to engage upon it a.e; would render con­ rod could effectively "haud the wretch in order." ceivably possible the cooperative erection of the extensive works The separate efforts of the two parents, exercised with diligence about to be here undertaken, which upon its completion will pay for the three quarters of a century since Gadsden thought he had lasting homage to the reality of such conception. devised a disciplinary check, utterly failed to keep the wanderer in The project for the rectification of the Rio Grande over many the straight and narrow way. In fact, the hobo refused to be miles of its course common to both neighbors and of common obedient to maternal pleadings or to the use of the rod by the utility to both, and the subjugation of its flood threat of destruc­ father. Therefore, after exhausting every effort by each, both tion to the great storehouse of urban and rural wealth reposing finally agreed that they must jointly make or find a way to say in the El Paso-Juarez Valley, is one which testifies in most eloquent to the river: "Here are your limits. You must cease to roam. terms to the material as well as civil and social good that may be We will tie you into a fixed enclosure. Within the set limits your attained by carrying into practice the true spirit which animates freedom is unrestricted. You may travel from El Paso and Ciudad Juarez and beyond to the Gulf without restraint along the route good neighbors. marked out as the result of the convention of 1933. You may • • • • • • • even disport yourself on the waters of the Gulf. But outside the For many years Old Man River, called "Rio Grande" in the channel surveyed and fixed your orders are: Thus far shalt thou United States and " Rio Bravo " in Mexico, which constitutes the go and no farther." boundary between Mexico and the United States, has been an When both parents thus spoke with authority, Old Man River, unruly fellow. The Spaniards, evidently first seeing the river at more amenable to family regulations than when he disported him­ its flood, called it the Rio Bravo del Norte, meaning the swift, self on wild rampages in his youth, saw that his roustabout days tumultous, and intractable river of the north. Long before Cortez were over. Under the chaperonage of Mr. L. M. Lawson and Mr. and Malinche had conquered Montezuma and the adventurous Armando Santacruz, commissioners from the two Republics, the Spaniard had made himself master from Veracruz to Acapulco, rather erratic vagrant ageed to settle down, to put on the harness and from California to Guatemala, and centuries before Sam of domesticity, and become a solid and staid and fireside-loving Houston had laid down his honors in the volunteer state to lose citizen. neither going out at night nor disturbing the peace of himself for a time in the then hinterland beyond the Father of neighbors. Waters, and then to win fame for himself and Texas, the music It is in recognition of this new attitude of Old Man River that of this river had been the lullaby of children of countless cen­ we are gathered here to celebrate the return of the prodigal. turies, and its banks have constituted the hunting ground and Father and mother have united in killing the fatted calf in his its waters the reservoir for fish for Indians from the time whereof honor. fashioning rings to put on his fingers and robes to cover the memory of man runneth not to the contrary. his shoulders, saying: " This wanderer has returned to tbe · :fire­ At times this untamed stream had held itself between its banks. side, all is forgiven, henceforth his vagrant ways will be remem~ Its course had been supposedly fixed by the Guadalupe Hidalgo bered no more against him." In fact, today we think rather of his Treaty of 1848, but no law or treaty was strong enough to curb service in repairing his ravages, for while the river destroyed the its riotous habit of life. At other periods, with a mighty torren­ forest on one side he was giving life to new trees sprouting up tial movement, it has not deigned to pay the slightest attention on the opposite bank. to any metes or bounds either provided by nature or by treaties The Rio Grande, accepting with good grace the restraint which or governments. Sometimes, as a matter of fact, "worn thin by the boundary commissions of the neighbor Republics have im­ drought and bled by irrigation, it is not a river at all but only a posed upon him, now makes ready to go into retreat comforted wide strip of white sand, baking and glaring in the sun, becoming with the favorite song of the workers on the mighty Mississippi. an imperious stream only in times of flood, and then it runs in a By the accompaniment of the music of his rippling waters the red torrent often half a mile wide, lifting an angry crest o:f sand- reformed and regulated Old Man River will console and comfort 1934 CONGRESSIONAL RECORD-SENATE 5839 himself by warbling the famous ditty o! the toilars along the ments, the basic convention now in force is the one negotiated banks of the Mississippi: on March 1, 1889, and designed to facmtate the principles con­ tained in the treaty of November 12, 1884, and to avoid the difD­ Old Man River, culties occasioned by the changes that were taking place 1n the That Old Man River, bed of the Rio Grande. Re must know something, In reviewing the boundary conventions, mention should be But don't say nothing, made of the convention of March 20, 1905, providing for the He just keeps roll1ng, ellmination of bancos In the Rio Grande from the provisions of He keeps on rolling along. the convention of November 12, 1884, and to the convention of He don't plant taters, he don't plant cotton. March 21, 1906, providing for the equitable distribution of the And them that plants 'em are soon forgotten. waters of the Rio Grande. But Old Man River, he justs keeps rolling along. The most recent boundary convention ls the one signed 1n Heart gets weary, sick of trying, Mexico City on February 1, 1933, by Dr. Jose Manuel Puig Casau­ I'se tired of living and feared of dying, ranc, Minister for Foreign Affairs of Mexico, a:i;id the Honorable But Old Man River, he just keeps rolling along. J. Reuben Clark, Jr., my predecessor in the office of Ambassador. Old Man River, It provides for the rectification of the Rio Grande, which is one That Old Man River, of the giant projects of this century, characterized by giant feats He must know something, of engineering. But don't say nothing, The works contemplated by this project are about to begin. He just keeps roll1ng, The problem of the rectification of the Rio Grande has been He keeps on rolling along. under study and consideration since 1924. Reports have been prepared 1n the past by the El Paso chapter of the American As­ Old Man River has a notable history. If lt could talk, what sociation of Engineers and by engineers representing various serv­ stories it could tell of adventures, of love, of passion, of broken ices of the Governments of the United States and of Mexico and hopes, of religious zeal, of friendship, a~d of war! Along its interested In boundary problems. These studies were of great banks in the whole length of its sinuosities over its rocky and assistance 1n the preparation of Minute 129 of July 31, 1930, sub­ sandy and shifting bed of over 2,000 miles it witnessed. the tread mitted to both Governments by the International Boundary Com­ of the Indians long before the white man from Spam or the mission, and which is the working plan of the Rectification Con­ Atlantic seaboard came to seek gold, some to find their graves vention. Briefly speaking, the plan provides for the construction when they encountered deserts without a sign of life-giving water. of a flood-retention dam at Caballo, N.Mex., above the cities of The early settlers found a country of long isolations and long El Paso and Ciudad Juarez, and of a rectified river channel. The journeys, a place of rebellions, prolific of intriguing legends, engineering features involve the shortening of the river from the and strange myths of fantastic shapes. Above all. as Harvey eastern outskirts of Cordoba Island to Box Canyon from 155 Fergusson says "They found it a land where water has always miles to 85, the construction of parallels along this floodway, and been scarce a~d therefore precious, a thing to be fought for, an increase in the slope. prayed for, and cherished 1n beautiful vessels-a land where There is one phase of the joint report of the consulting en­ thunder is sacred and rain is a god." gineers that merits special attention, and that is the principle of There is romance and tragedy and progress from its source 1n segregated tracts. In order that neither Nation shall sacrifice the mountains of southern Colorado"through the long stretch of national area, the plan provides that the total land to be segre· 700 miles to El Paso and 1,300 miles from El Paso to the Gulf of gated or cut off from one country shall equal that segregated or Mexico. It ls this latter stretch with which we are most. inter­ cut off from the other. An inspection of the corresponding maps ested today, for this celebration is held to commemorate the shows that 59 separate tracts will be cut off from Mexico and 65 beginning of the rectification of the river as to the international from the United States. The total area to be cut from each coun­ boundary between the two countries. try is approximately 3,460 acres. Part of the international boundary was established from 1852 The total cost is estimated at $6,000,000, of which about $5,000,- to 1854 by Major Emory, the United States commissioner, and 000 are proratable between the two Governments. The share of Mr. Jose Salazar, the Mexican commissioner. The Rio Grande is the United States is about four and one fourth million dollars, a meandering and uncontrolled stream, subject to changes and or about 88 percent of the proratable cost, and that of Mexico creating detached areas known as "bancos" from one country to under $600,000, or about 12 percent. the other. The towns and agricultural lands on both ~anks of The benefits to be derived from the straightened and rectified the river suffer much loss and damage due to devasta.tmg flood channel plans are mutual to the two Governments. They afford conditions. flood protection and perm.it cultivation, improvement, and settle­ The boundary problems covered by conventions negotiated ment of even larger areas adjoining the Rio Grande than a.re now between the Governments of the United States and of Mexico possible under the meandering river conditions. may be reviewed as follows: Approximately 70,000 acres on the American side and 35,000 acres The fixing of the Rio Grande as part of the international on the Mexican side would receive the advantages arising from boundary between the two Nations was determined by the Treaty added irrigating facil1ties. of Guadalupe Hidalgo of February 2, 1848. Changes were intro­ Other benefits may be mentioned. They Include the establish­ duced by the Gadsden Treaty, also known as the "Treaty of ment of a definite water boundary which can be controlled be­ La Mesilla", of December 30, 1853. tween El Paso and Box Canyon; the prevention of future changes Article V of the Treaty of Guadalupe specifies that the boundary in the river channel involving the detachment from one country line between the two Republics shall commence in the Gulf of to the other of areas of land, which in the past have given rise Mexico, 3 leagues from land, opposite the m~uth of t~e Rio to legal and economic difiiculties; the rendering less difficult the Grande, otherwise called "Rio Bravo del Norte , or opposite the enforcement of the national raw of both countries by fixing the mouth of its deepest branch, if it should have more than one rectified river as the international boundary as contemplated by branch emptying directly into the sea; from thence, up the middle the treaties now in force between the two countries. of that river, following the deepest channel, where it has more The rectification convention of February 1, 1933, disposes of one than one, to the point where it strikes the southern boundary of phase of the boundary problems between the two Governments. New Mexico· thence westwardly a.long the whole southern bound­ There remain still other problems that must be solved. They ary of New Mexico (which runs north of the town called "Paso") affect not only the Rio Grande but also the Colorado River. Let to its western termination. The southern and western lim1ts of us hope that satisfactory formulae may be found by both Gov­ New Mexico, mentioned in this article, are those la.id down in ernments that will early eliminate all controversial issues between the map entitled "Map of the United Mexican States, as orga.niz.ed countries which today set an example to the whole world in and defined by various acts of the Congress of said Republic, .and enlightened and unselfish friendship. constructed according to the best authorities. Revised edition. This celebration would be like the play of Hamlet without Published at New York in 1847 by J. Disturnell." It was declared Ham.let in his proper role if honor and just praise were not given that the map was added to this treaty, bearing the signatures and to the commissioners and engineers whose wisdom and expertness seals of the plenipotentiaries. It was agreed that the boundary made possible the plan which both Governments have approved. line then established should be religiously respected by each of It was once said that all wealth came from three sources--the the two Republics, and no change should ever be made therein, land, the mines, and the sea. True enough, but the extraction of except by the express and free consent of both Nations, lawfully the increased and increasing abundant wealth of all three waits given by the general government of each. in conformity with it.s upon the magic touch of the engineer. Let us, therefore, pause own Constitution. as we pay tribute to former Commissioner Gustavo P. Serrano Under article I of the Gadsden Treaty, the boundary, insofar and his successor, Commissioner Armando Santacruz, for Mexico, as the Rio Grande is concerned, was fixed as beginning 1n the Gulf and Commissioner L. M. Lawson for the United States, and to the of Mexico, 3 leagues from land, opposite the mouth of the Rio consulting engineers of both countries, who, like other men of Grande as provided in the fifth article of the Treaty of Guadalupe vision, have shown themselves masters over the forces of nature Hidalgo; thence as defined in said article up the middle o! that and caused hitherto turbulent waters to contribute to the weal river to the point where the parallel 31° 47' N. crosses the same. of man and advance helpful intercourse and accord between Owing to difficulties regarding the exact location of the boundary nations. line established in accordance with the terms of the treaties re­ There is an old maxim-I do not know whether it originated ferred to above, the two Governments concluded a convention on along with the category of wise Spanish sayings or proverbs-­ July 29, 1882, providing for the i·estoration of boundary monu­ that "money makes the mare go." At any rate it has been long ments and the erection of new ones. It also created the Interna­ current 1n the domain above the Rio Grande and below the Rio tional Boundary Commission, having the power and authority Bravo. The work of engineers, the agreement upon conventions, to exercise certain functions along the boundary. While other and the signing of treaties were essential preliminary steps to con­ boundary conventions were concluded between the two Govern- struction J.naugurated here today. Scientists and statesmen may 5840 CONGRESSIONAL RECORD-SENATE APRIL 2 plant, but the rock of credit must be struck or -cash forthcoming received from Mr. E. P. Cramer, of Plainfield. N.J., on certain if streams of money-" the wherewithal "-may gush forth to carry on the actual inauguration and completion of the giant project. phases of the present administration. There might have been a long wait for a congressional appropria­ There being no objection, the letter was ordered to be tion for the American construction if the new deal had not printed in the RECORD, as follows: been inaugurated in March of last year. Among the first fruits of the Public Works organization was the allotment of $2,800,000 PLAINFIELD, N.J., March 20, 1934. of the $5,256,634 of the part to be paid by the United States, wbj,ch makes available now half the money needed for the rectification of the river from El Paso to the Gulf. This allocation was made on February 7 · of the present year. As we celebrate the work of t"'.a.i;e&.~~aa.-:M~.:.:..;o.e.:L..de.a.J.; American and Mexican commissioners and engineers and give a vote of confidence to the men who will do the actual work of construction, we :rejoice that the plan of American construction was advanced and guaranteed by the inauguration of new policies of expedition and devotion to the development of natural re­ sources. This new policy foreshadows a new and better day, en­ visioned by President Roosevelt in his inaugural address, and in his address to the Pan American Union. The rectification of the Rio Grande is more than changing the l-.:~~~.-.,,-;,;~~.;.;.,,;-....;;.;;;;a;.,_~..;;;;:;.;.;;-.~~~~.:::.t:.~ ancient course of an historic river. It is the outward symbol of 1'°"'...... ,~...... ,..~--= ._....,...... ,;;,o~~-=-.....-~ something greater and more beneficial than confining a stream be- ~~,.._:;~.:::....:~~~~=~~ tween stable and enduring banks. In fact this constructive inter­ national achievement is the result of a rectification and perfection 1 -::~r:::.~~~~~~:.:=:~=:~~~~~~!~~~...!!.;~~~~~~~ of the relations between the peoples of Mexico and the United States. There was a time-happily long sinc,e gone and remem­ bered only as a. bad dream-when periodically there was lack of complete understanding between the peoples of the two countries. Misconception of what was in the heart of each resulted now and then in causing the p.eoples of Mexico and the United States to erupt in harsh words or deeds, imitating the unruly outbursts of Old Man River. As he overflowed his banks, so passions aroused for lack of knowledge and appreciation witnessed strife and even war between peoples who could have lived like brothers if waters and mountains and deserts and mimtal myopia had not prevented their seeing eye to eye. Territorial separation, love of military glory, and the lure of conquest blinded Americans and Mexicans to the real sentiment and true interests of both countries. As passion and hate overflowed their banks, they called each other names, and sometimes the air resounded with epithets of " Gringo .. and" Greaser", misnomers happily entombed in dishonored graves. They, and li~ outpourings born of ignorance of one another, have all gone into the limbo of discarded error. Today Mexicans and Americans are coming to be the David and Jonathan nations of the western Hemisphere. Rivers and other bodies of water were once believed to have been created to separate peoples. That was the ancient creed. In those days the Rio Bravo del Norte was a barrier, and later, w~n it was fixed as the boundary line, it was regarded as separating the two countries. We have learned that the old conception was based on lack of understanding of the mind of the Creator when he fashioned the waters for man's enrichment and not to divide ~~7"l~~~~~~~~~~~~~~~~.l:'f.;l.!! nation from nation. Today the Rio Grande is not looked upon as a warning to people n::~~=:r-:~:;;.;;;:=~~-&~;:;::;;.;...;~:;::;;;.,..;::..,.., of each country "shinny on your own side." In Europe forts l"!~u~lti~~~~fil<~N_~~~~~~~~EL.:!LH! and bayonets are military st!ntinels of boundaries between states. i... Here this Old Man River is becoming a safe means of travel and communication by which friendly neighbors more and more bridge the stream for the exchange of amenities and commerce. The rectification of the river will make easier ingress and egress from one country to the other. As all good citizens on both sides of the river rejoice in the rectification of Old Man River, we know that there will come with it a spiritual rectification and a new birth of regard and the brotherhood born of mutuality of interest and ,_.._..... _~.,;;.;.;.;..w..;;....;;....;;.,;;;;;;;;;;._;~:::;.:;:-. ambitions. There exists today no chasm between Mexico and the United ~~~~~~~~;o;;o.;~~:~'?-~~..:.: States. Old Man River, rectified and strengthened, is the out- ward expression of the cordial neighborly feeling which is more ~~i5;t:j~ufi9t!~~~~~:j~~~~~ and more to bind the peoples of both countries in the lasting I• bonds of amity and friendship. This day attests to the world ~~;;;g:~..-;:;.....--r.=::1...... -::;.::::.i::.::....Q;~="-~= that as the souls of Jonathan and David were knit together, so the ....,i:iOilil.,,_..., hearts of Mexico and the United States beat in unison. This relationship, cemented in the celebration of an event made l...,.11oW.1~~..n.1.11~bo. possible only by joint action, recalls a beautiful sentiment which was expressed by a schoolgirl in France during the days of the ~~~~~~~~~!!;:::~~°'· World war. She wrote: "It was only a little river-not much larger than a brook. It ~~~~ce.~~~Wil~W~...QU~~m1&.lu!;luiW:UW.tL1~ was called the Yser. It was so small that you could talk from 1-::.i..ut::.::1....&.1.&..~~..w.1~..w.;;u.~.A..~~L..O.I...+ia.JJtez:..o bank to bank without raising your voice. The swallows could 1.J~ile'.C:::WU:~~lr.ffil :H.y across with one sweep of their wings. On those banks millions -i of men were standing--eye to eye, but the distance that separated them was as great as the distance that separates the stars· the difference between right and injustice. ' r-u~OrK " The Atlantic Ocean is a vast body of water, so great that the 1~:--:~..,...~~~~~~-:):2.,.!.~ sea gulls cannot fiy across. It takes the great American liners 7 ~~.iililo~;...!!.iw,A.-"l days and 7 nights, going at full speed, before they sight the light- ~t;~~~;~~~~~~ ;;::;...~==•-:: houses of France, but from shore to shore hearts are touching." 1- 0ld Man River, ta.med and harnessed, is the bond of union which These and many otheu~rapu unsoUlld..-a.n.d-dJ.sllo.nest..l.amUla.y makes Mexico and the United States as united for today and to- seen framed in the Whi~gyse n e.d Jn the Qongress.. morrow and all the tomorrows as were the French and Americans a e flen the ciiil,!!era of pollt!Qal _oppm:tuni.sm.. and ..demagogeey in the World War. spring }!!.. act v cy an~ rUJJ.. raill.I>~t. OL.Qlle, a.m tired of tt L for one, should ike to see the Congress stop giving the White CERTAIN PHASES OF THE PRESENT ADMINISTRATION-LETTER FROM House any more wildcat laws to prop up the new deal. At the E. P. CRAMER same time I should like to see the laws already passed repealed as Mr. BARBOUR. Mr. President, I ask unanimous consent soon as legal and practicable. Quit the expenditures, the hypoc.. in in RECORD risy, the undermining of our institutions, the dishonesty, the to have printed full the a letter which I have hocus-pocus. Let the abolition of child labor remain; for that 1a 1934 CONGRESSIONAL RECORD-SENATE 5841 The America willing that all future Presidents shall have the authori­ ties which are asserted and which are exercised by the present President? Must we not have in mind that powers once conferred upon an Executive are reclaimed by the people and by the legisla­ tive body with difficulties, if at all? Who is there that does not know that in a time of peace, as never before in our history, we have ceased to be a government of laws and have become a government of men? Who does not recognize this truth and its E. P. CRAMER. significance to America? Are we not also concerned because of the knowledge that the ADDRESS BY SENATOR WHITE TO REPUBLICAN CONVENTION OF program inaugurated and put into effect since the 4th of March MAINE a year ago is a. repudiation of every principle for which the Demo­ Mr. McNARY. Mr. President, on Friday, March 23, 1934, cratic Party has stood through the more than a. century of its political life; of its last adopted· platform; of the recent pre­ the distinguished junior Senator from Maine [Mr. WHITE] election utterances of its Presidential candidate; and that it delivered an impressive and important speech to the Repub­ equally violates the tenets of Republicanism? Have the great licans of Maine and the Nation. I ask unanimous consent political parties and their leaders been wrong in the principles that the speech may be printed in the RECORD. they have declared and in the policies they have pursued through the long years? Are we assured· that the new road upon which There being no objection, the speech was ordered to be we are now traveling, and which turns sharply to the left from printed in the RECORD, as follows: that heretofore followed by our country, is the one on which we epublicans of Maine, in convention assembled, the circum­ should intrust the institutions of America and the future well­ stances under which we meet are unusual in that for the first being of our people? The signposts along this road as far as time in the 76 years of the life of the Republican Party, the we have journeyed tell us that it leads to a further surrender of country found itself in 1932, during a Republican administra­ local self-government; to a further encroachment on the rights of tion, suffering from wide-spread economic distress. The signifi­ our States; to an abandonment of the functions of our legislative · cance of this fact looms larger when we recall that during every branch of government; to the building-up of a great centralized period of Democratic control in this three quarters of a century Federal State beyond the direct control of our people; to a Gov­ industrial stagnation has been the accompaniment of such politi­ ernment under which the social, the economic, and the industrial cal domination. It will be more amazing than either of these life of the Nation is regimented and ordered by a bureaucratic facts just stated if general and permanent betterment comes to regime. I cannot believe this to be the reasoned desire of the our people from the efforts and the policies of a Democratic admin- American people. traJ;iqp We are disturbed, too, because the history of the world teaches I speak to you as one whose belie! in the principles and in the that a government asserting such wide-flung authority as that now high purpose of our party is unshaken. We have suffered serious urged and exercised in Washington always continues to answer and political reverses in the past and have emerged triumphant. There to meet every challenge of its rights and of its wisdom with new is definitely in my mind that in the mid-term elections of our claims of authority and the exercise of new powers. This tendency first great Republican President, political defeats everywhere over­ ·ts visible and vita.I in Washington today. Inevitable also in such took Republican candidates. In that election the Republican ma­ a government is the asserted right to appoint and to control those jority in the State of Maine almost reached the vanishing point. administering its wide activities. From its very necessity for self­ Ohio elected in that year 14 Democratic and but 5 Republican perpetuation it becomes a political government. Such is your Congressmen; New York, New Jersey, Illinois, and Indiana were Government today. At no time in half a century, since the fight Democratic. In Pennsylvania the congressional delegation was against the spoils system began, has merit in appointment and divided, and the Democratic vote exceeded the Republican vote in efficiency in the public service counted so little. Civil-service the State. Had Lincoln been running for ofilce that year, upon reform has been made an empty phrase. the votes cast he would have been a beaten candidate. Political If history teaches truth, in such a Government as has been defeats did not daunt Abraham Lincoln. They did not lead him developed, the practice of binding sections of the Nation and to disloyalty to fundamentals. They did not move him to com­ groups of people in loyalty to the central authority by payments promise with that which was expedient and unsound. From the from the Public Treasury is a certain consequence. In Roman days disasters of that year Lincoln and our party rose with new strength, such contributions were called donatives. Roman Emperors first and for almo.st a half a century, with but two brief interruptions, bought the loyalty of the Praetorian Guard. They extended their the people of the Nation committed the destinies of America to benefactions to the Roman legions scattered throughout the em­ Republican leadership. In those years is written the story of a pire. The evil habit then forced them to secure the loyalty of the Nation's development which finds no parallel in the world's history. senate and of the people of influence in Rome with like favors. The compelling reason for this persisting faith of the people 1n The historians of the past and of our modern day single this the Republican Party and in its candidates was their belie! that practice out as an outstanding contribution to the break-down in our party had high political and governmental standards and deep the morale of the Roman people and to the disintegration of the and abiding convictions concerning them to which it gave con­ Empire. tinued devotion. Loyalty to ideals always commands respect. Something of the same sort is going on here in America today. Today the need for adherence to principles is as great as it was in We built Boulder Dam, not because of its contributions to the those dark days of 1862. The response of the American people to well-being of au our people but at the behest of a few States political sanity and to the defense of American institutions and through which flows the Colorado River. We appeased the people conceptions is as certain now as the response of the people follow­ of the Tennessee Valley with Muscle Shoals. In the far Northwest ing that disastrous year of 1862 was decisive. there is authorized a. great power plant on the Columbia River. We temporarily satisfy the farmers of the Midwest with the As one surveys the political and economic events of the present, definite facts stand out in clear relief. No one should fall to note processing tax on wheat and hogs, and we fatten the purse and and to acknowledge the extraordinary popularity of the President sweeten the temper of the cotton grower of the South with a like and the inclination of the people to yield their judgments to his tax. These projects and expenditures are sectional in demand, and leadership. This springs from his gracious personality; from a they are local in their benefits. Maine shares only in the burden belief in his humanitarian purposes; from an admiration of his of their cost. What is to be the end? It promises to be an swiftness of decision and of act; and from a recognition of the exhausted Treasury; new and heavier truces; an enormously in­ gravity of the problems and the weight of the burdens that rest creased debt; and a constantly mounting deficit. upon him. We should recognize also that within the year there In these general terms I have briefly described the country's has come a betterment of conditions in many lines of activity and situation and have sought to assign reasons for our anxieties. I in the lot of many Americans. A third fact of significance is that avail myself of the right and I meet the duty of a member of the throughout the world there has come an undoubted improvement minority by emphasizing the truth of these assertions of speci­ in social, industrial, and economic conditions which find reflection fications. here. Why is it, then. that America's business life is still hesitant? EXPENDITURES--DEBT--DEFICIT Why ls it that America, more richly endowed than any of the other Witht.n the year of Democratic control of the Nation our public nations of the earth, lags behind them 1n recuperation from her expenditures have mounted to unprecedented peace-time figures. economic ills? Why are thoughtful men and women in our coun­ Our Democratic friends promised an immediate and a drastic cut try so gravely disturbed by the conditions in which we now are, in governmental expenditures and a balanced Budget. The pain­ by the tendencies of the moment? Why are they so concerned as ful truth, however, ls that in last July the Federal Government to the future? was spending nine millions a clay; in October, sixteen millions a I answer, first of all, because it is apparent that in the legislation day; in December, twenty-four millions a day; in January of this of recent months, in administrative act, and in executive purpose year, thirty-two millions a day; and there are ominous signs that as it is made known to us, we are following a course charted by this figure may soon be greater. neither of the great political parties of our country nor by the The Nation's debt in 1930 was sixteen billions. It ls now set at free will of our legislative body chosen to express the thought and twenty-seven billions and soon will be thirty-two billions, and this ' purpose o1 the people of America. For the first time in our is borrowed money the administration is spending! Instead. of a. political history the policies now in force and which from day to balanced Budget the President, in his Budget message, estimated day are extended 1n new applications are the determinations of a our deficit for the current fiscal year would total $7,309,000,000. personal government rather than a government of a party or of Later estimates reduce this figure. What it will be no man knows. a representative body or of the people. We rightfully wonder to Have these expenditures been productive of national recovery in what extremes we are being carried and what our situation as a the degree promised by them? The negligible reemployment of government is to be when the dominating and the persuasive force men in productive and self-sustaining industry, the m1lllons de­ of the President passes from the political scene. Are we ot pendent upon charity and upon ar~iflclal activities financed l>Y. 5842 CONGRESSIONAL RECORD-SENATE APRIL 2. public funds return an emphatic negative answer. We look to the State of Maine to :fi.x hours of labor; to establish a mtnlmum other nations-to Canada, to England-and we see them, without wage; and to regulate the practices of industry within its borders.. such lavishness of outlay and without abandonment of their basic The authority to approve these codes, the dictation of their conceptions of government, farther along the road of material terms, and the enforcement thereof present a question of the recovery than are we of the United States. Their experience as­ gravest import to America. We must recognize that the final serts in words that should be heard in every governmental place authority with respect to the great and intricate business life of that a nation may no more spend or experiment itself into pros­ America has been vested in a single man, whose decision in all perity than can the individual. Our people, our towns, our coun­ these m~tters is the law itself, and whose power is more arbitrary ties, our States, and our Federal Government made a large con­ than was ever given in the modern world to any individual. tribution to their present plight through recklessness of expendi­ Whatever may have been the initial purpose, these codes in their ture, and it is folly to believe that the same habits which brought latter-day terms and operation have become the breeders of our difficulties can now free us from their consequences. Thrift industrial strife; the destroyers of opportunity; the weapons of and economy would have saved millions of individuals and political dictatorial power; a menace to industrial recovery. Is this America. units everywhere from their present distresses, and they will make in which we live? the mightiest contribution to the return of better days. FARM RELIEF-PROCESSING TAXES--MAINJ(S CONTRIBUTION I have said that the Government deficit for the present year was originally estimated to be $7,309,000,000. Upon the basis of Agricultural relief has engaged the attention of this adminis• population, Maine's part of this deficit and of the estimated cost tration. Its worth-while activities within this field found origi­ of the Government for this year is approximately $74,000,000. nal authority in legislation enacted during the administration Expenditures within the State by the Federal Government are of Mr. Hoover and his Republican predecessors. The Agricul­ but a small part of this total of Maine's obligation. I ask tural Adjustment Act passed by the present administration ex­ the business man of Maine, and the workingman dependent upon tended provisions of previous law, but special interest attaches industry, the farmer of our State, and all our other citizens, of to the processing taxes authorized in this a.ct. The legislation what profit to Maine are the few millions expended within our declares that it is the policy of Congress to establish prices for borders by the Federal Government when compared with this farm products at a level that will give agricultural commodities · burden of obligation directly resulting from such expenditures and a purchasing power with respect to articles that farmers buy. such debts? Let the citizen of Maine figure his proportion of equivalent to their purchasing power in the period between August $74,000,000. It amounts to more than $92 for every man, woman, 1909 and July 1914. In order to bring about this result, the and child within our State, a total of $460 for every family of scheme was hit upon of hiring farmers to reduce their acreage five members. Are you getting your money's worth? And threat­ and then to destroy crops and products in existence. It was ening to make the burden of these debts still heavier, there looms assumed that as acreage was reduced and products destroyed, the before you new and increased taxes by the Federal Government. price of these basic commodities affected would automat.ically Yet we were promised reduced expenditures, economy in govern­ rise. To the thrifty New Englander the thought of destroying ment, and a balanced Budget. property comes as a distinct shock-but this destruction was not going to be at the cost of the farmer who plowed in his crops CODES--N.R.A. or destroyed his hogs, for you and I were to reimburse him for I have said that our form of Government was undergoing that which was destroyed through a processing tax laid upon the startling changes, and I have made specific reference to the grant people of the country who use these commodities. to our President of extraordinary powers. An illustration con­ Now, although Maine does not share in these processing taxes, stantly before us is the N .R.A. and its activities. Industry was and although Maine farmers have not destroyed crops, yet under authorized to establish codes for its regulation. Abuses and· de­ this benefic~nt scheme Maine has been called upon to pay. The fects in the functioning of our complex industrial life were figures reported to the Congress bring home the unpleasant truth recognized. The original conception to which Congress gave ap­ that to the end of this last year there was collected in Maine on proval was that industry through voluntary agreements to be these processing taxes a total of a million and forty-three thou­ embodied in codes, might shorten hours, spread employment, raise sand dollars and that not a single dollar was repaid to us on wages, eliminate ruinous price cutting and unfair trade practices, this account. The figures show that $959,000 was collected in our and lift the standards of our business life. The plan was pro­ State from the processing tax on cotton. I cannot wax enthusi­ posed for industrial and trade groups. It did not by the author­ astic over a system which takes from our hard-pressed people this ity of the statute extend beyond this. These codes were to be amount of money to be paid to the people of other States for the i1Ubmitted to the President for his approval. When so approved, wanton destruction of crops and farm products. This is a sales they were to constitute the guide for the business life of the tax, not of the character often urged, but one upon the necessities industries involved. of life. I had not supposed Maine approved such a tax. Such a plan and purpose appealed strongly to the citizen and to the legislator. Evils inherent in the program and errors in COMPENSATORY TAXES ON PRODUCTS OF MAINE administration are today so obvious as to bring regret to all. Further hardship results to our Maine people from this proc­ There have been approved and put in operation approximately essing tax. The legislation which authorized it permitted the 324 of these codes. In limited respects there has been good in Secretary of Agriculture, if satisfied that the result of cotton­ them. Child labor has been restricted, if not eliminated, in our processing tax would be an excessive shift in consumption from industrial life, and there has been, through shortened hours, some cotton to a competing commodity, to impose a compensatory tax distribution of employment opportunity. But these gains have upon this alleged competitive commodity. Under this authority not compensated for the disturbing effects of the codes upon our the Secretary of Agriculture decided that he was justified in im­ industrial life. Neither have there been encouraging increases in posing such a compensatory tax upon certain paper products. the weekly pay envelops. In defiance of the clear intent of the He determined the need for the tax, the articles to be subjected law, there have been written in these codes wage and cost differ­ thereto, and the amount of the tax. He levied a so-called "com­ entials based on the geographical location of competing factors in pensatory tax" upon the various paper products of our State, the industry involved. These differentials are arbitrary, assuring including paper cement bags and paper towels. A careful analy­ economic advantage to one section of the country as against an­ sis of the taxes imposed upon these articles shows that the tax other. The results are prejudicial to Maine. It is clear, too, that levied upon paper cement bags upon the basis of use is 600 per­ the codes are not the voluntary agreements of industry, but in cent greater than the tax upon a cotton bag, and that the tax on many cases and particulars they embody the rules and conclusions paper towels, when the average number of uses is compared, is of the code authority unsought and undesired by industry. 1,100 to 1,300 percent greater than the tax per use on cotton We find as we survey the results that the codes have not tended towels. I condemn such inequality in the imposition of the tax toward regulated competition, but to arrogant monopoly. They burden. have brought arbitrary increases of prices to consumers, and they TARIFFS--RECIPROCAL TRADE ARRANGEMENTS have shut the door of opportunity in the face of the smaller busi­ The Republican Party of Maine believes in a protective tariff. ness man. They have filled factories with rules and regulations The agricultural and the industrial life of our State is dependent and agents of Government, all business with the fear of Govern­ upon the maintenance of this principle. We recognize that with ment and with paralyzing doubts as to the future. It has been changing economic and industrial conditions, modifications of written that if you examine a code carefully, you will find hidden tariff rates must be made from time to time to conform our tariff or open somebody's scheme to set up a monopoly, or at least to policy thereto. We believe recommendations with respect to such limit production; to fix prices; to guarantee profits; and worse, in adjustments should come from the study and the findings of an many cases, the joker that would put somebody out of business or independent and bipartisan commission. The President, however, keep somebody in business who ought to be put out, which would has recently asked that the Congress give him power to make keep a new man from getting into the game and a new idea from trade arrangements and to increase or lower tariffs to the extent being adopted. In other words, freeze the business as it now is of 50 percent. Involved in this proposal are major considerations for the people now in it. of principle. It contemplates a surrender of the authority of the In late days Washington has been visited with critics of codes, elected representatives of the people and the building-up of and their administration and defects in the system have been executive power. It is an assault on the independence and the admitted by the administrative chief, General Johnson. Most usefulness of a bipartisan tari1I commission of permanent charac­ enlightening as to present tendencies and most sinister is his ter, long advocated by both political parties. The right to arrange assertion that in the administration of codes there can be no these contemplated reciprocal agreements vests in the President distinction between interstate and intrastate business; that the the power of life or death over American industry. Reciprocal code authority must control workers and employers wholly within agreements involve giving as well as receiving. They involve the a State in order to protect interstate industry. This doctrine of sacrifice of one industry that another may secure favor. The exer­ the administration is the assertion of an authority superior to cise of the power requires decision as between clashing interests, that of a State over its citizens and over their business carried on the preferment of one class as against another, discrimination wholly within that State. Of very necessity it denies the right of against one section that another may be accorded trade advan- 1934 CONGRESSIONAL RECORD-SENATE 5843 tage. I oppose such despotic power in any individual from whose PLANNED ECONOMY--GOVERNUENT INTERFERENCE decis!o:::is there is no appeal. Of greater consequence than particular acts of the adminis- We of Maine may well be pardoned if we look at this proposal tration is its philosophy. It believes in a planned economy. It through the eyes of self-interest and reach a conclusion concern- proceeds on the theory that it is both the right and the duty of ing it because of its possible effects upon our State. The Presi- the Federal Government to merge the individual in the mass and dent does not aslr authority to transfer products from the free list to regiment and control the life and activities of this mass man. to the dutiable list. It is clear, then, that under this requested Under its plan we face a future based on quotas, allotments, and authori~y we may hope for no protection for pulp, pulpwood, news- market allocations: a future in which wages, hours of labor, prac­ print, lobsters, and other products of our State now unprotected. tices, all factors entering into the costs of industry are controlled, As to those products of Maine now upon the dutiable list, what prices fixed, and distribution directed by th':l Federal Government; is liable to happen in the event of a rec~procity treaty with Can- a future in which all is artificial, arbitrary, uncertain-dependent ada? What concessions will Canada ask m the American market? upon the dictatorial power of Government; a future in which our The answer to this questioi:i is to be found. i~ what Canada P:o- antitrust statutes are to stand suspended that combinations ap­ duces. In the eastern ~ort10ns of the Domm1on her outstandmg . proved by the Executive may engage in practices now frowned products are lumber, darry products, poultry products, apples, hay, upon, in which taxes and ta.riffs are imposed by Executive au­ potatoes--indeed, every product of a Maine farm and every product thority, in which the gold content of our dollar, the issuance of of the sea. . currency, the convertibility and the redemption thereof, our whole In the event of a negotiated reciprocal-treaty arrangement with financial system and policy are subject to Executive. determination Canada, how can Maine hope to escape the direct and the destruc- and dictation; a future in which freedom of speech and of the tive competition of favored Canadian products? .V\'.'hatever is press is in jeopardy, in which criticism of the Executive or of the given to Canada will be at our cost. How can any c1t1zen of our administration's policy ls an offense, in whlch loose charge of · State look with favor upon a proposal so fraught with danger to wrongdoing is accepted as proof, and in which punishment to indi­ us as this? It is the gravest threat to the welfare of our State victual and to business ls meted out without opportunity for hear- ever seriously advanced. ing or defense; a future in which men and industry are no longer MONETARY POLICY free but are coerced and terrorized by an all-powerful central This administration has breached the Government's contracts authority; a future in which we find in America not a Govern­ with the millions of our people who bought its bonds, by their ment of coordinate branches, with the checks and balances of our terms to be paid in gold of a definite standard. It has depreciated Constitution respected and observed, but rather a Government in the value of our dollar in the markets of the world; it has au- which the Executive asserts and exercises authority and power thorized the issue of billions of irredeemable currency. By its foreign to every American tradition. This ls the creed of the monetary policy it has brought confusion, has impaired our credit, Democratic Party of today. · and has taken from millions of our people a substantial portion The Republican Party challenges this Democratic conception. of their savings, has lessened the value of their insurance and Combinations and trusts are the enemies of that competitive busi­ other investments, and has reduced the buying power of every ness spirit which has made our industrial world great. We must person living upon a salary or upon wages throughout the length choose whether we shall be free men or 125,000,000 subjects of and breadth of our land. In these matters we find further illus- experimentation in the planned economy of the Democratic ad­ tration of Executive domination. The single act which has tended ministration. We must preserve freedom of action in a free mar­ to stability and to renewed confidence in our monetary and bank- ket if we wish to retain a liberal democracy and the forms and lng system is that guaranteeing bank deposits, forced upon the substance of representative government. The Republican Party administration by Republican insistence. demands that the antitrust laws shall not be abandoned but strengthened if necessary to preserve this opportunity and this RELIEF--SECTIONALISM-PARTISANSHIP principle. Our party believes that the great contributions to Other activities of this administration give evidence of its atti­ thought, to science, to moral and material progress have not been tude toward our State and its people. Legislation has been passed mass-inspired. Individuals have given inspiration to human for­ under which Federal direct relief was to be made available to the ward movements. Circumscribe the individual, and the leavening several States in the Union. The figures show that of the amounts power is gone, and the retrogression of mankind will have begun. spent for relief in the State of Maine less than 15 percent came The Republican Party believes in the individual; in the largest from the Federal Treasury while more than 85 percent was from measure of social, industrial, and political liberty. Without this funds furnished locally and by our own State government. As liberty the human mind is in chains! Our party believes in local against this 85-percent contribution by our own people, I find self-government. It would maintain the dignity and the respon­ that other States, including some of those to whom we of Maine s!bility of the States of the Federal Union. It pledges anew its have contributed $959,000 in cotton-processing taxes, have con­ loyalty to representative and to constitutional government. It tributed less than 1 percent to the relief of their own people and stands, as did its first great leader, for these underlying prin­ th.at the Federal Government has contributed 99 percent and ciples. more. Such an inequitable distribution of public funds, such The Republican Party must continue to be forward-looking. evidence of sec~·onalism in works of charity, is a shock to every It came into being as the champion of human rights. It has sense of right. e need for relief was urgent and great. Distress written upon the statute books of the Nation a great body of social and human su erlng impose a special obligation upon those re­ legislation. Remove therefrom Republican contributions and how sponsible for the administration of relief measures. Throughout pitifully inadequate would be that which remains. We of Maine the land charges of waste, fraud, and partisanship have marked must champion the rights of labor, including that of collective the organization of the Civil Works Administration. Maine, act!on and bal'gaining; welfare work in all its phases; the cause happily, has escaped such public censures. Relief must be con­ of education, always the enemy of ignorance. We should provide tinued, but how long are we to gi~ountenance and support to against the hazards of disability and unemployment and the in­ such practices in its administration,? firmities and misfortunes of old age; and we should give en­ SOLDIERS-P ONS couragement to all those proper activities of government making for human betterment and human happiness. The soldier of the Nation has always had the solicitude of the These beneficent ends may be achieved within the forms of our Republican Party. Most of the legislation written upon our stat­ Constitution and in harmony with its spirit. ute books in his behalf and for his widow and his dependents has My appeal goes to you before me, to all citizens of our State, to been placed there by Republican Congresses. We have recognized unite in militant opposition to those vagaries in government to­ the Nation's obligation, and we have been eager to meet that ward which in our temporary distress we have been· beguiled, to obligation. As a party we find no justification for the attitude of join in a new pledge of loyalty and devotion to the America con­ the present Democratic administration toward the defenders of ceived and decllcated by the fathers, the America which has been our flag. During the period of their Spanish War service more the inspiration and the hope of freemen everywhere. th&n 10,000 of our military and mwal forces died; within less than a year after their discharge 7,000 more died of diseases contracted A DANGEROUS TARIFF EXPERIMENT-ARTICLE BY HENRY P. FLETCHER in the war. Tens of thousands more died of diseases incurred in the Tropics and in unsanitary surroundings in our own country. Mr. REED. Mr. President, I send to the desk a recently Sl.."'1ce this administration came into power, some 230,000 Spanish published article by Mr. Henry P. Fletcher, formerly Chair­ War pension cases have been reviewed. Of that number, includ­ man of the Tariff Commissiou, entitled "A Dangerous Tariff ing those of all the widows and the dependents of the 17,000 who died during the war or within the year after the termination of Experiment'', which I ask unanimous consent to have their service, only about 5,500 were held to rest on service-con­ printed in the Appendix of the RECORD. nected disabilities. Of the World War veterans less than 8 percent There being no objectio~ the article was ordered to be were found by this administration during the last year to have printed in the RECORD. service-connected disabilities. These two statements attest the harshness of the regulations put into effect by the administration. [From the Awakener of Apr. 1, 1934] If further proof be needed of the unwarranted treatment of the The President has asked Congress to surrender almost complete soldier, it may be seen in the fact that 25 modifications of the control of our tariffs by granting to him, for a 3-year period, the original Presidential order have been made during the year. The right to lower or increase import duties by 50 percent and the Republican Party is not willing that the Federal Treasury should right to use this power in ba.rgaining With other governments be opened Without limitation to the soldier, but it is against for broader outlets for our products in foreign markets, without regulations and administration so severe that less than 8 percent further reference of these agreements to the Congress or the of the World War veterans and less than 6 percent of the Spanish Senate. War veterans upon our pension or compensation rolls are able to This is a radical requeat. It goes to the roots of popular gov­ prove service origin of their disabilities. We propose to see that ernment. It is an undisguised grant of legislative power. The justice is done the American soldier. Constitution says in its very ttrst article, "all legislative power 5844 CONGRESSIONAL RECORD-SENATE APRIL 2 the form of collective bargaining the administration desires them to adopt, the hours of work, wages, salaries, etc. Indeed, the ad­ ministration will be in control of all these industries, and they will do as they are told or go out of business or into the hands of those whom the Government may designate to run them. This is possible; indeed, it is in line with the aims of the so-callied "brain trust." Some of the bad effects of the proposed plan might be mitigated if the President would consent to an arrangement by which no changes of duty would be ordered, or no bargains made, until after thorough and impartial survey of the industr i~s to be affected by an enlarged and more permanently constituted Tariff Commission. Such a commission should necessarily be composed of t.he highest type of appointees-men unbiased, and specially qualified, appointed for life, as are our Federal judges, and equipped to make impartial surveys of our economic structure and needs. This body, under the direction of the Secretary of State, could have complete charge of all details of negotiation of tariff bargains, and no reductions or increases could be ordered unless upon and after its survey and published report. This might be some safeguard; but it would be far safer that the Congress should retain a veto voice on any arrangement which shall be made, by a provision that no reduction or increase can take effect until approved by joint resolution, or, as is the usual course, by consent of the Senate. , Also, if we adopt the new and radical course proposed by the President, we shall have to abandon our present most -favored­ nation policy because, under that policy, whatever benefits or opportunities in our market we may extend to one country, we must extend to any other country which wm give us the same advantages as does the first country we have bargained with. In short t~ pr_C?posed new policy, in spite of certain mechanical van a e~is li IO ove- nco i tional. • _...w.chWng Dr. Wirt's keen intellect, his honesty, character, and integrity, and QJ.11' agriculture w..pii;:h is ow as fllli.Y protected as o m.anufac­ his ability to analyze a.ny subject in which his great mind is ~n,_J;le made do th Go ernment',s igdi~ un<;le threat interested, feel that only through such open and full hearing of redua1on ol duties on forei~ competing r9the view of the State Department. profits tax of 5 percent above that. To prevent any harsh­ The bill makes a number of other important changes ness, we permit the corporation to declare its capital stock. which I shall not describe in detail at this time. Among If it declares it too low, then we will get it by virtue of the these are improvements in the provisions for the adminis­ tax of 5 percent over the 12 ~ percent on the excess profits. tration of the taxes upon gasoline and lubricating oil, which, In other words, we are using the leverage to make them put without changes in the rates of tax, are estimated to produce in a fair capital stock value. $18,000,000 additional revenue by insuring the collection of Fifth. Your committee found that a considerable loss of the tax from all persons upon whom it is imposed. The pro­ revenue from partnerships had occurred during the past few visions for the taxation of annuities have been revised so years by reason of· the fact that losses from the sales of that a person in receipt of annuities totaling more than securities by partnerships were permitted as a deduction $500 a year-we excluded annuities of $500 and less a yen.r against the incomes from other sources of the individual from the provisions of the tax-will be compelled to pay a partners. Senators will remember the revelations before the tax upon that part which is deemed to be interest upon the Committee on Banking and Currency where it was shown consideration paid for the annuities. that certain individuals were using the losses of their part­ Under the existing law no tax in imposed upon the re.:. nerships in making retUl'ns. Of course, these partners were cipient of an annuity until he has received back the entire compelled to pay taxes upon the partnership profits in its amount paid for it. Since an annuity represents in part prosperous years, and in many cases these taxable profits interest upon the consideration paid, it seems fair to tax the had exceeded the deductible losses recently allowed. The annuitant currently upon the proportion of the annuity pay­ bill safeguards the revenues in the future, however, by the ment which represents interest, and the bill so provides. application of the new capital gain and loss provisions to The· bill also contains a provision which will deny losses partnerships as well as to individuals and corporations. in the cases of sales or exchanges of property between mem­ Under the bill, the partnership will be permitted to deduct bers of a family or between a shareholder and a corporation 5848 _CONGRESSIONAL RECORD-SENAT~ APRIL 2. the western district. This appointment was expected to " break " in which the shareholder owns a majority of the stock. In up until the time the President left for Florida. It is reported several recent cases losses of this character have proved to here that the President is going to draw the loyalty lines more be an important method of tax avoidance. closely hereafter in giving jobs. If this be the case the chances Your committee has strengthened the provisions of the of Gosnell are not so bright. House bill designed to impose an additional tax upon citizens Senator BYRNES has recommended Frank Myers, of Charleston, for judge. Senator SMITH has submitted a list of several South and corporations of foreign countries which impose dis­ Carolina attorneys, asking that the best qualified man be ap­ criminatory or extraterritorial taxes upon citizens and cor­ pointed. Myers' name is not on the list. In view of the veto porations of this country. We hope that the provision as yesterday in the Senate it will be interesting to see who gets the now drawn will effectively discourage this discrimination. job. There are many other technical and administrative Mr. President, I desire to repudiate any such insinuation changes which will perfect the existing law and in the aggre­ as contained in ·that article against the President of the gate will increase the revenue by about $20,000,000. United States and his Ca;binet. We have not yet reached In conclusion, I believe that the revenue bill, as your com­ the point where an administration will attempt to coerce mittee has reported it, effects a series of major improve­ men to do its bidding by the threat of withholding patron­ ments in the existing law. The income-tax rates have not age. We are honest in our convictions and we have our been greatly changed and only one important new tax has duty to perform. I do not believe that any Cabinet officer been imposed-the capital-stock tax. Nevertheless, by tight­ or the President of the United States would indulge in a ening up the provisions of the present law additional reve­ practice which runs contrary to the Corrupt Practices Act, nue will be produced which the Government urgently needs. even if they did not base their course of action upon a In my opinion, the great mass of honest taxpayers in the much. higher plane than that. They have a right to voice country will approve of the action we have taken, since we their opinion, but they have no right, and they have not have attempted to make the tax provisions effective upon all exercised any such right, to coerce loyal Democrats to do taxpayers alike and to put an end to the various schemes the bidding of the administration. and devices by which some wealthy taxpayers were evading I desire to take this occasion to repudiate any such in­ the imposition of the income tax upon them. The bill dis­ sinuation as contained in the article I have just read. tributes the tax burden fairly among taxpayers and in no Where the correspondent who wrote tb.e article obtained way impedes legitimate business transactions. I hope that his information I do not know. Subsequent events, how­ the bill can be promptly passed and carried into effect. ever, will prove whether his implied reflection on our ad­ Mr. President, I hope in the consideration of the bill we ministration is true or whether it is not. may in the main hold to the recommendations of the com­ Mr. ASHURST. Mr. President- mittee and pass the bill as speedily as possible, and as we The VICE PRESIDENT. Does the Senator from Ne­ go along section by section we shall be glad to attempt to braska yield to the Senator from Arizona? explain any of its provisions concerning which explanation may be desired. Mr. NORRIS. I yield. Mr. ASHURST. Mr. President, I hope my friend the ALLEGED COERCION OF DEMOCRATS Senator from South Cairolina will not be offended when I Mr. NORRIS obtained the :floor. say to him he may possess his soul in peace . . Mr. SMITH. Mr. President- All the Presidents of the United States, we are proud to The VICE PRESIDENT. Does the Senator from Ne­ say, have been gentlemen. braska yield to the Senator from South Carolina? Mr. SMITH. I agree with the Senator from Arizona. Mr. NORRIS. Mr. President, I understand the Senator Mr. ASHURST. Scan their lives and it will be found that from South Carolina desires to make a few remarks. I every man elevated to the office of President of the United shall be glad to yield to him if I can have an understanding States has been a gentleman, and I believe that, without that I will not yield the :floor by so doing. I yield with that any invidious distinctions, one of the most exquisite, most understanding. nearly perfect gentleman among all those who have oc­ Mr. SMITH. Mr. President, what I have to say will not cupied the White House, is the present occupant. Senators take very long. It is a matter which I think is of vital need have no fear, on this side or the other side of the aisle, interest to every Democratic Senator. that any action they take will result in any discrimination There appeared fn the newspapers of my State on Friday, or lack of consideration toward them on the part of the March 30, an article of which I think particularly the Demo­ President of the United States. crats ought to take· cognizance. The heading of the article Senators on this side of the aisle may vote their convic­ is," F. D.R. Plans Tightening of Loyalty Lines." I desire to tions as they should vote them, and they will be secure from read that article, which is as follows: any discrimination SQ far as patronage is concerned. I say Many stories are going around Washington today as to what here that Franklin D. Roosevelt would despise a Senator­ President Roosevelt is going to do to Congress for overriding his veto of the independent offices supply bill carrying liberal provi­ that is a hard word-he would despise a; Senator who voted sions for veterans and Federal employees. The enactment of the to sustain a veto simply to please a President of the United bill puts his operating Budget over $200,000,000 in the red, accord­ States. ing to administration leaders. There is wide-spread belief that he will call on Congress to Mr. SMITH. The Senator from Arizona will agree with raise taxes in this amount before it adjourns. • • • me, and I am sure the Senator from Nebraska [Mr. NORRIS] One thing is certain, Congress will hear more about its vote this will likewise, that the newspaper article I just read carries week to override the veto when the President returns to Wash­ a very humiliating implication, that we are to be punished ington from southern waters. The failure of Senator SMITH to support the administration if we vote our convictions, and rewarded if we vote someone yesterday may change the complexion of the patronage situation else's convictions. in South Carolina. Senator BYRNES led the fight for the admin­ Mr. ASHURST. Mr. President, the Senator, although he istration, thereby putting him in an even better position to dic­ tate Federal patronage in his State, if he so desires. is a courageous man, is unduly alarmed. No man who un· Cabinet officers' swung into action yesterday in an effort to derstands men and who so successfully deals with men, as obtain the 4 needed votes to sustain the President's veto. It was does Franklin D. Roosevelt, would think of drawing the line, learned that Secretary of Commerce Roper made a spirited appeal to senator SMITH. Postmaster General Farley, operating from the or of making any discrimination as to patronage against any White House, conducted a telephone-appeal campaign just before Senator. the vote was taken. A number of Senators declined to talk with Mr. SMITH. The Senator need not stand here to defend the Postmaster General when he called. the President. I do not think anyone here is obliged ta MARSHALSHIP JOBS defend him. There are a number of Federal places in South Carolina ·which are open or could be made open. These include the marshal for Mr. ASHURST and Mr. PITTMAN addressed the Chair. the western district, judge, district attorney, and marshal for the Mr. NORRIS. Mr. President-- eastern d.istrict, a.nd the collector of port at Charleston. The VICE PRESIDENT. The Senator from Nebraska has Senator SMITH has made several direct appeals to President Roosevelt !or the appointment of Rube 9osnell as marshal for the :floor.. Does he yield; and if so, to whom.2 1934 CONGRESSIONAL RECORD-SENATE 5849 Mr. NORRIS. I understand that it is the desire to take George King Nye Smith Gibson La Follette O'Mahoney Stetwer a recess at this time, and if that is agreeable to the Senator Glass Lewis Overton Thomas, Okla. from Arkansas, I will continue my remarks when the Senate Goldsborough Logan Patterson Thomas, Utah shall reconvene after the funeral services. Gore Lonergan Pittman Thompson Hale McAdoo Pope Townsend FUNERAL OF REPRESENTATIVE POU, OF NORTH CAROLINA-JOINT Harrison McCarran Reed Tydings SESSION Hastings McGill Reynolds Vandenberg Hatch McKellar Robinson, Ark. VanNuys Mr. ROBINSON of Arkansas. Mr. President, the Senate Hayden McNary Robinson, Ind. Wagner has acc~pted the invitation of the House of Representatives Hebert Metcalf Russell Walcott to participate in a joint session at which tribute will be paid Johnson Murphy Schall Walsh Kean Neely Sheppard White to the memory of the late EDWARD W. Pou, a Member of the Keyes Norris Shipstead House of Representatives from the State·of North Carolina. The VICE PRESIDENT.· Eighty-seven Senators having Mr. Pou has served as a Member of Congress for a period answered to their names, a quorum is present. of about 33 years. His loyalty to public duty has been dem­ The Senator from Nebraska CMr. NORRIS] is entitled to onstrated throughout that long service. In order that Sen­ the floor. ators may be prepared to participate in the joint session it is desired that a recess now be taken until 1 o'clock and DISCLOSURES OF UTILITIES INVESTIGATION BY FEDERAL TRADE 45 minutes p.m., at which time the Senate will reconvene, COMMISSION be called to order by the Vice President, and proceed in a Mr. NORRIS. Mr. President, again the conscience of the body to the Hall of the House of Representatives. I, there­ American people has been shocked by the disclosures that fore, move that the Senate now take a recess until 1 o'clock have taken place before the Federal Trade Commission and 45 minutes p.m. in their investigations of the Power Trust. Yet, Mr. Presi­ The motion was agreed to; and Cat 1 o'clock and 2 minutes dent, nothing new has developed. The same disclosures, p.m.) the Senate took a recess until 1 o'clock and 45 min­ and even worse ones, have been made by that investigation utes p.m. during the last 3 years, the period during which it has been At the expiration of the recess the Senate reassembled. proceeding. The most recent disclosure is one that directly Mr. ROBINSON of Arkansas. I suggest the absence of a affects the Legislature of the State of New York. quorum. From the files of the J. G. White Management Corpora­ The VICE PRESIDENT. The clerk will call the roll. tion, one of the subsidiaries of the Associated Gas & Electric The legislative clerk called the roll, and the following Co., were taken copies of letters which were written by a Sena tors answered to their names: member of the State Senate of the State of New York. A Adams Couzens Kean Reed letter dated March 26, 1927, reads as follows: Ashurst Davis Keyes Reynolds Mr. S. J. Magee- Austin Dickinson King Robinson, Ark. Bachman Dieterich La Follette Robinson, Ind. He was one of the officials of the electric lit:ht subsidiary; Bankhead D111 Lewis Russell Barbour Duffy Logan Schall also vice president of the Associated Gas & Electric Co.- Barkley Erickson Lonergan Sheppard NEw YoRK CrrY, N.Y. Black Fess McAdoo Shipstead MY DEAR MR. MAGEE: In keeping with your instructions of March Bone Fletcher McCarran Smith 22 regarding my expense account for the month of March in con­ Borah Frazier McGill Steiwer Brown George McKellar Thomas, Okla. nection with tbe village election, I herewith hand you bill as sug­ Bulow Gibson McNary Thomas, Utah gested, made out to the Chasm Power Co. Byrd Glass Metcalf Thompson is is Byrnes Goldsborough Murphy Townsend That another subsidiary which, I understand, the Capper Gore Neely Tydings operating company in the home town of the State senator in Caraway Hale Norris Vandenberg question. Carey Harrison Nye Van Nuys Clark Hastings O'Mahoney Wagner The legislature adjourned last Friday, and I have now returned Connally Hatch Overton Walcott to Chateaugay and will be here most of the coming summer. I! Coolidge Hayden Patterson Walsh at any time I can be of further service to you, please do not Copeland Hebert Pittman White hesitate to call upon me. · Costigan Johnson Pope Observe, Mr. President, that he says "further service to Mr. LEWIS. I beg the privilege of making the same an­ you ", indicating from the letter itself that he has been of nouncement as to certain absent Senators as on the previous some service. roll call. I hope my work during the past session was satisfactory to The VICE PRESIDENT. Eighty-seven Senators having your company, not so much for the new legislation enacted but answered to their names, there is a quorum present. from the fact that many detriment al bills which were introduced Mr. ROBINSON of Arkansas. Mr. President, I move that we were able to kill in my committee. the Senate now proceed to the Hall of the House of Rep­ Very truly yours, resentatives, in accordance with the resolution heretofore W. T. THAYER. agreed to, and that at the conclusion of the services the Mr. Thayer at that time was chairman in the New York Senate return to its Chamber. State Senate of the committee that had to do with all bills The motion was agreed to; and Cat 1 o'clock and 50 min­ affecting electric light and gas activities. He says: utes p.m.) the Senate, preceded by the Sergeant at Arms, I hope my work during the past session was satisfactory to your the Vice President, and the Secretary, proceeded to the Hall company. of the House of Representatives for the purpose of attend­ The company was not in his constituency. In the State ing the funeral ceremonies. senate he was serving a senatorial district, but the office of The Senate returned to its Chamber at 2 o'clock and 45 the company and its main activities were outside that sena­ minutes p.m., and the Vice President resumed the chair. torial district. CALL OF THE ROLL I hope my services have been satisfactory to your company. Mr. ROBINSON of Arkansas. I suggest the absence of a Not to his constituents; not to the people of the State of quorum. New York but to " your company." The VICE PRESIDENT. The clerk will call the roll. In another letter written by Mr. Thayer on March 15, The legislative clerk called the roll, and the following 1928, nearly a year afterwards, on the stationery of the New Senators answered to their names: York State Senate, Mr. Thayer says again: Adams Bone Carey Dickinson Ashurst Borah Clark Dieterich THE STATE SENATE OF THE STATE OF NEW YORK, Austin Brown Connally Dill Albany, March 15, 1928. Bachman Bulow Coolidge Duffy Mr. c. A. GREE.."'il"IDGE, Bankhead Byrd Copeland Erickson Care of J. G. White .Management Ccrporat ion, Barbour Byrnes Costigan Fess 33 Liberty Street, New York City. Barkley Capper Couzens Fletcher DEAR Sm: As per our conversation this afternoon on the phone, Black Caraway Davis Frazier I herewith hand you original bills a.a introdu~ed by Assemblyman 5850, CONGRESSIONAL RECORD-SENATE APRIL 2 Sargent in the assembly, nos. 1889 and 1890. I also attach the Mr. BORAH. Even if he had no other power than that of amended bills which just came up from the printer since our conversation. a vote, it would still be objectionable. Mr. Sargent advises me that the amendments were suggested Mr. NORRIS. Exactly; it would be bad then, but it is by the International Paper Co., and they take care of their objec­ doubly bad when he is a member of the committee which tions. From the fact that Assemblyman Sargent secured a rush handles the particular bills; and it is worse yet when he is print order on these amendments the bill will come over to the senate and can go on the calendar for Monday night. chairman of that committee, and, as these letters indicate, After you have examined them, and if you feel that they should everything passed through his hands; and, according to these be held up 1n the senate, you had better call me on the phone at letters, nothing passed through his hands but it was first Chateaugay either Friday or Saturday, Very truly yours, submitted to his client, the Power Trust. When objection W. T. THAYER. was made by his client, no other conclusion can be drawn from these letters than that he would proceed to hold bills There is another letter written by the chairman of this up in the senate. committee to the same subsidiary of the Associated Gas & How many bills, how many acts of the New York Legis­ Electiic Co., part of the .Power Trust of America. lature have been heid up by this man? How many other Again, a letter from Mr. Thayer written on the stationery key men does the Power Trust have in the New York State of the Senate of the State of New York, dated March 17, Senate and in the New York State House of Representatives; 1927, reads as follows: and how many keymen do they have in other legislatures WARREN T. THAYER, THmTY-FOURTH DISTRICT, all over the United States? CHAIRMAN COMMITTEE ON PUBLIC SERVICE. Mr. President, Mr. Greenidge, to whom some of these let­ S. J. MAGEE, ters were directed, vice president of the Utility Management J. G. White Management Corporation, New York City. MY DEAR MR. MAGEE: Referring again to Senator Westall's blll Corporation, a subsidiary, issued a statement in defense of no. 898, introductory no. 789, which authorizes two or more mu­ these disclosures. What do these letters disclose? It is not nicipalities to jointly acquire, construct, lease, and maintain simply what is shown on the face of the letters; it is not waterworks system, I beg to advise I took the matter up with simply the particular instances to which these letters point Senator Westall and he had prepared an amendment to the blll which will make it satisfactory to your people. When this bill is directly; but it is the knowledge one must get from reading reprinted I will send you a copy of it for your consideration and these letters that these are only samples. They show on to see if the objectionable features have been eliminated. their face that they are only indications pointing to other Very truly yours, W. T. THAYER. activities performed for, and other relations held by, this member of the New York State Senate to the Power Trust. Nothing is said in either of these letters about whether Now, what defense was made when these letters were the people of the State of New York desire the so-called published? "objectionable features" or whether they are just or un­ Mr. WAGNER. Mr. President-- just, but that an amendment had been prepared which Mr. NORRIS. I yield to the Senator from New York. would make the bill satisfactory to the Power Trust. " If Mr. WAGNER. I did not hear the entire discussion of it is not", as the preceding letter said, "call me on the the Senator. Did he point out the fact that this particular phone and the bill will be held up in the Senate." State senator was chairman of the committee which had Another letter, written by Mr. Thayer, is to Mr. S. J. under consideration bills affecting public utilities? Magee, 33 Liberty Street, New York City, N.Y., which reads: Mr. NORRIS. Yes; and he is still ai member of the com- DEAR Sm: During our village election just passed I spent $457 mittee. in an effort to win the election. We had many loyal supporters, but the propaganda spread by our opponents, along with the Mr. WAGNER. He is still a member of the committee? infiuence of the banks, we were unable to win, but we are not Mr. NORRIS. But not its chairman. discouraged-we will beat them yet. Mr. WAGNER. It shows what chance there is under The above amount i.s made up in printing, advertising, attor­ neys' fees, postage, and automobile hire on election day; also such circumstances. watchers and checkers at the polls during the election. Mr. NORRIS. Yes; it shows how the Power Trust is Will you kindly advise me if it would be satisfactory to put this safeguarding every avenue through which injury might pos­ amount in my next expense account to Mr. Pierce, the same as I did last year? sibly come to them, and they do not care what means they Awaiting your reply, I beg to remain, employ to protect their interests, as I am going to show Very truly yours, from the defense which they make of this man. W. T. THAYER. Mr. BORAH. Mr. President-- Remember that this election was in a village where, as I The PRESIDING OFFICER (Mr. McGILL in the chair). remember, there were fewer than 500 votes altogether cast at Does the Senator from Nebraska yield to the Senator from the election. It seemed at this election they needed attor­ Idaho? neys and other assistance, including watchers and checkers Mr. NORRIS. I yield to the Senator from Idaho. whose employment cost $457. Mr. BORAH. Of course, the fact that he was charirman Another important thing is disclosed by these letters. of the committee is an exceedingly important item, be­ They indicate on their face that what he is inquiring about, cause, undoubtedly, the Power Trust is looking for men of what he is talking about in these letters constitute but a infiuence; but, after all, the fa.ct that he was an attorney small part of the activities of this man who presided in the for the corporation arnd at the same time purporting to Senate of the State of New York at the committee hearings legislate in regard to it is a situation which cannot be on all bills having anything to do with gas, electricity, or defended. water. Mr. NORRIS. No, sir; it cannot be defended in a free Mr. BORAH. Mr. President-- country. Mr. NORRIS. I yield to the Senator from Idaho. Mr. WAGNER. Mr. President, I agree absolutely with Mr. BORAH. AB I understand, Mr. Thayer, while he was what the Senator says about that; but I wanted to empha­ a member of the State senate, was in the employ as an attor­ size the reprehensible nature of the whole transaction. ney of certain corporations? Mr. NORRIS. Now let us see whait defense Mr. Green­ Mr. NORRIS. Undoubtedly. The letters, I think, clearly idge makes for this man. There are the letters published so disclose. They indicate that he was not only on the pay in the newspapers as coming from Washington where the roll, but he says, "Shall I put this bill in the same way as Federal Trade Commission is investigating the Power Trust. I put in other bills", as to the amount of which we know This man Greenidge, who defends this man, was vice presi­ nothing. dent of the company. Speaking of the publication of these Mr. BORAH. It is a very objectionable relation for a man letters he says: occupy. in the legislature to This is another instance 1n which the Federal Trade Com.mis... Mr. NORRIS. Especially when he occupies a key position, sion has, without any explanation or opportunity for explana~ion, as he did. given out information capable of being used by the foes of utiliti~ 1934 CONGRESSIONAL RECORD-SENATE 5851 in their campaign of Iles against the utilltles and slander of honest Mr. JOHNSON. May I ask the name of the distinguished public officials. We believe that every right-thinking citizen will gentleman who has made such remarks? be justly incensed at such tactics. Mr. NORRIS. He is Mr. C. A. Greenidge. Let us look at that defense for just a moment. He says: Mr. JOHNSON. Is·he an attorney? This is another instance in which the Federal Trade Commis­ Mr. NORRIS. He is vice president of the Utility Manage­ sion has, without any explanation or opportunity for explanation, ment Corporation. According to these lettei-s, he is also given out information. vice president of the Associated Gas & Electric Co. That is Mr. President, would you want the Federal Trade Commis­ the company the Federal Trade Commission was investigat­ sion to make an explanation, and if they were as wise as ing. That company in itself is a subsidiary of another Solomon could they make an explanation of such conduct branch of the Power Trust. that would be satisfactory to the utilities and their officials? !\Ir. JOHNSON. I am wondering and curious to know if The truth is that these letters were evidence disclosed at he is an attorney and a member of the American · Bar that hearing. The letters were taken from the files of the Association. subsidiaries of the Power Trust itself; this very evidence, Mr. NORRIS. No; but he is dealing with a man who is an these very witnesses are making the case. Unfriendly attorney and who is probably a member of the American Bar though they may be, the Federal Trade Commission have Association. As to that, however. I cannot speak authorita­ done nothing but bring out the evidence from day to day tively. which they are required to bring out by a resolution of the Before I conclude I shall show that the disclosures before Senate under which they are making the investigation. The the Federal Trade Commission in this instance were very writer says: similar to some other disclosures that followed the next day Without any opportunity of explanation- which involve Tennessee and Kentucky, and still other dis­ At that hearing these same power officials were repre­ closures which relate to Texas and other sections of the sented by attorneys who sat there in the presence of the country, where this same man, Magee, and the same Asso­ Federal Trade Commission when this evidence was being ciated Gas & Electric Co. are manipulating elections, not only developed, and not one word of explanation did they utter­ in New York but in Tennessee, and have been for years. and ::(would rather commend them for being wise and keep­ I want to invite attention to an editorial which appeared ing silent, for I do not know what they could have said. in the Washington Herald of March 31, last Saturday, which I think well describes the feeling of the American people. It No statement was issued by the Federal Trade Commis­ reads: sion. There is the evidence taken from the enemy. There POWER RING ACTIVITIES CALL FOR INQUIRY is the mouth of the Federal Power Trust speaking its own The letters of a New York State senator introduced before the language, showing that these men who think such conduct Federal Trade Commission, showing the receipt of money and is honest and honorable, regard an attorney who was chair­ pointing to the rendition of service to public-utility companies, man in the state Senate of New York of a committee hav­ have created a sensation thl."oughout the country. Not that the link which ha.s long existed in every State of the ing to do with public utilities as being one against whom no Union between the utility interests and our lawmakers was ever evidence should be produced even though he has signed it a matter of doubt. Not that the servile pliancy of legislative himself. bodies to the wishes of the Power Trust was unsuspected. Such connection and subservience has been a matter of common knowl­ Mr. Greenidge says, "By the foes of public utilities in their edge for many years. campaign of lies." If this is a lie, then the Power Trust They have been written in the public consciousness by the un­ people themselves stand convicted of perjury. It is their interrupted thwarting of all attempts at genuine regulation, whether by better laws or better supervision, through the political own evidence. It is not the evidence of those who are op­ power of the utility interests in every State capital. posed to the activities of the Power Trust. It is the evi­ dence of the Power Trust itself. I think that is literally true. There is not, in my judg­ Again, MI. Greenidge says that it is used " against the ment, a State capital in the United States where the same utilities and slander of honest public officials." Evidently sort of tactics is not used either by the Associated Gas & the Power Trust itself thought the publication of the letters Electric Co. or some other member of the great American a slander against the New York State senator who wrote the Power Trust. I am going to discuss some of them this letters and signed them himself. "Honest public officials!" afternoon. " Slander!" And yet there is no denial anywhere of the Mr. COPELAND. Mr. President-- truth of any of the statements. The disclosure shows the The PRESIDING OFFICER. Does the Senator from kind of campaign that was being conducted. They wanted Nebraska yield to the Senator from New York? to win the election in northern New York where a village Mr. NORRIS. I yield. campaign was being conducted. They had as their attorney Mr. COPELAND. I am obliged to leave the Chamber to to help win it the chairman of the Public Utilities Com­ attend a committee meeting, but before doing so I want to mittee in the State Senate of New York. He lived there He thank the Senator from Nebraska for calling public atten­ was employed by them and evidently was ori their staff, be­ tion to the subject he is now discussing. When I first heard cause his letter says, " Shall I send this bill to the same of the incident, I sent word to Albany that I hoped there man to whom I sent the other bills?" His letter shows that might be an investigation made by the legislature of my he rendered a monthly account to the Power Trust for his State. I have been embarrassed in the matter because I services, while the people of his legislative district thought might be accused of partisanship, for the reason that it so be was serving them in making the laws that should govern happens the man charged is not a member of my party. But the people of New York. I do feel that for the good of my own State there should be This man Greenidge says that the publication of that an investigation of the circumstance. I hope the address of State senator's letter is "a slander upon honest public the Senator will result in greater activity on the part of the officials." I think he is laboring under a false impression Legislature of the State of New York. when he says that "every right-minded, thinking citizen Mr. NORRIS. I thank the Senator. will be incensed at such tactics." The American people have The editorial continues: not fallen yet so low that they think an attorney for the This sinister alliance has been established with almost the Power Trust. which has its net spread all over the United force of an admission, by the uniform failure of all bills seeking to limit excessive rates or to curb the exploitation of both con­ States, will be able to go to the country and control even sumer and investor by the speculative financiers of the public­ village elections when they claim their interests are at stake. utility business. Mr. JOHNSON. Mr. President-- MI. President, it is not limited to State legislatures, but The PRESIDING OFFICER. Does the Senator from it includes the Federal Congress as well. The Senator from Nebraska yi~ld to the Senator from California? Indiana [Mr. ROBINSON], who is doing me the honor of Mr. NORRIS. Certainly. listening to what I say, sat with me and with the present LXXVill--370 5852 CONGRESSIONAL RECORD-SENATE APRIL 2 Chairman of the Judiciary Committee, the Senator from The disclosures are peculiarly timely in connection with Gover­ nor Lehman's gallant fight for justice to the consumer and rate­ Arizona [Mr. AsHURST], as a subcommittee of that great payer, so long helpless in the combined grip of the utility com­ committee and listened to extended hearings on a bill intro­ panies and their subservient creatures in the legislature. duced by the Senator from California"[Mr. JOHNSONJ. No longer can silence keep mum! No longer can guilt sit The Senator from Indiana knows the kind of legislation tight! The tactics of evasion and "the huddle" have broken down. The case is now Wide open I that was proposed and the way it was fought in the com­ Here at last are facts-facts to begin with, facts to go on with, mittee. We all know how it was fought here on the :floor facts which puncture the hollow disclaimers with which the Power of the Senate. The measure has passed the Senate and is Trust has met accusations in the pas~accusations which were true, but not specific. now pending in the House of Representatives, with opposi­ Let the Governor and the honest members of the New York tion and with danger of its defeat through a misunderstand­ Legislature, whether Republican or Democratic, now put their ing, I believe, or a lack of opportunity to understand, on the hand to the plow and make the furrow straight and deep. part of the Members of that great body, which, in my judg­ The revelations in these letters constitute a great "break" for the people and the public interes~throughout the country and in ment, would pass it unanimously if the Members· once under­ every part of it. stood what is at issue and what the issue is. The sinister alliance between power and politics--electric power · This editorial says: and polluted politics-reaches into every State in the Union. In every community its baleful effects a.re felt! · But now come three letters from Warren T. Thayer, a member of the State Senate of New York, which put the matter upon a Mr. NORRIS. Mr. President, let us hurriedly go down to footing very different from mere suspicion. Tennessee and see what was going on there about the time These letters amount to a confirmation of disclosures made by the Hearst newspapers of Power Trust practices. these things were going on in New York. Writing on the stationery of the New York Senate, Senator About 75 or 100 miles from Memphis, Tenn., is the city of Thayer, in one letter, mentions the adjournment of the legislature Paris, a town of between five and ten thousand population, and his return to his home. "If at any time I can be of further service to you", he adds, I believe. A little nearer to Memphis is a city called McKen­ " please do not hesitate to call upon me." zie, smaller than Paris. These cities we1·e supplied with elec­ tricity by their own municipal governments. About 1928, Do the merchants and the farmers of the district Senator 1929, or 1930 the Power Trust undertook to get control of Thayer represents believe, or have they ever believed, that these city-managed plants. Here is a letter taken from the their senator was taking orders from New York City? Do they realize that he was in the employ of a subsidiary of the investigation of the Federal Trade Commission. If you go there and desire to find it, it is exhibit no. 5772. It is Power Trust and that his pockets were lined with money to written to Mr. Magee. He is the same man to whom Sena­ pay his expenses in their own village election? tor Thayer wrote. He is the same man who was operating Quoting further: up in northern New York in a village election, and about I hope my work during the past session was satisfactory to your the same time was operating down in Paris, Tenn. This let­ company- ter was written by :Mr. Fitch. It reads as follows: Imagine a Senator of the United States, for instance, writ­ PARIS, TENN., May 15, 1929. ing to this corporation in New York and saying: Mr. S. J. MAGEE, I hope my service here in the Senate, representing a sovereign New Yark: State, has been satisfactory to your company. There is beginning to crystallize at Paris a movement to com· promise our difficulties With the city. Under the lease contract, Mr. President, I ask unanimous consent that the remain­ the ultimate price Which the city would have received at the time der of this editorial be printed in the RECORD at this point of the deeding of the property to us, and the payment of the $45,000 (was] the sum of $704,500. in my remarks. In the political mix-up, Jim Porter, the present owner of the The PRESIDING OFFICER. Without objection, it is so opposition ice plant, 1s a dominant factor in the new council. ordered. Just grasp that. Down in Paris, Tenn., Jim Porter, who The i·emainder of the editorial is as follows: was in the ice business, was a member of the city council; " I hope my work during the past session was satisfactory to and Jim Porter was not friendly. He was not satisfied with your company, not so much for the new legislation enacted but from the fact that many detrimental bills which were introduced what the city was getting out of this sale. He wanted to we were able to kill in my committee." get more. Notice, now, how the Power Trust undertook to In another letter addressed to C. A. Greenidge, care of the J. G. get Jim Porter: White Management Corporation, of New York City, one of the op­ We have set up a very severe ice competition with his property erating companies for the Associated Gas & Electric Co. in its up-State power plants, the same senator, referring to certain bills and he is beginning to squeal. in the New York Senate, said: The great New York corporation known as the "Associ­ "After you have examined them, and if you feel that they should be held up in the senate, you had better call me on the phone at ated Gas & Electric Co.", which the Federal Trade Commis­ Chateaugay (the senator's home) either Friday or Saturday." sion are investigating, of which Mr. Magee is the vice presi­ Litt ~ e wonder that the demand is now heard for a formal inves- dent, went down into Paris, Tenn., where they were trying tigation by a committee of the legislature. · One of the senator's colleagues demands the institution of im­ to get the local. plant, and there was an unfriendly man on peachment proceedings. the council, and they proceeded to get that man. How? Of course, there should be an investigation of the alliance be­ They bought out the opposing ice-dealer's business, and they tween the power interests and their obedient tools in the legis­ went into the ice business, in the name of somebody else, lature's membership. Its existence is not open to doubt. The reality of such an alliance has been repeatedly charged. of course, but they bought the other ice business, and they Three months ago, in a brave and sensational speech at Utica, put the price of ice down so low that this man, Jim Porter, the Republican State chairman, W. Kingsland Macy, called upon could not live. They were selling ice below cos.t. They sold the Republican members of the assembly to break away from this alliance and to "come clean" as sincere representatives of the it, I understand, as low as 10 cents a hundred pounds ta people and the public interest. put Jim Porter out of business, because Jim Porter was There was some insincere splutter by Old Guard Republicans standing for a larger sum of money to come to the munici­ about bringing Mr. Macy before the assembly to substantiate his pality from the Power Trust; and, as they said here-this charges. There was a move, which was transparently insincere, for a perfunctory and whitewashing investigation. letter was written to the vice president of the Associated The public easily saw through it and recognized that it was a Gas & Electric Co. in New York City- mere gesture. So did Chairman Macy, who said the only investi­ In the political mix-up, Jim Porter, the present owner of the gation he would countenance would be a genuine investigation by opposition ice plant, is a dominant factor in the new councll. a duly appointed legislative committee, with power to compel the We have set up a very severe ice competition with his property attendance of witnesses and the production of evidence. and he is beginning to squeal. He is now anxious that the council By one of those singular " breaks " of good fortune which revive effect a compromise of the matter and suggests that the city confidence in the truth--confl.dence that truth is not without ought to receive about $600,000 for the property. This information powerful, although unseen, allies-these letters now reach the light of day. comes-- They supply chapter and verse-compelling reason for at last a Now, listen to this. See the connection of these· people- genuine and effective exposure of the whole mess. This information comes from the superintendent of the L. & N. Such an investigation cannot be avoided. Railroad Co.- 1934 CONGRESSIONAL RECORD-SENATE 5853 The Louisville & Nashville Railroad Co.- This ls a suit removed from the cha.ncery court of Henry County, Tenn. The complainant is the city of Paris, a municipal corpora­ Memphis, a former citizen of Paris, and who was helpful to us 1n tion of Tennessee. The respondent is a corporation chartered by securing the original contract. He also secured for us the _power another State, and the amount involved exceeds $3,000, exclusive contract with the shops at Paris, and is otherwise very fnendly. of costs and interests. That shows the connection between great corporations. According to the law, under that statement of facts, the The superintendent of the Louisville & Nashville Railroad Federal court would have jurisdiction, and in this kind of a Co. gave this information, which was passed on to the vice case, under the same state of facts, if the House will pass the president of the Associateq. Gas & Electric Co. of New York Johnson bill as we passed it, it would not have jurisdiction. City. The judge said further on: It does seem to me, Mr. President, that this ought to bring The contract was accepted by the officials of the defendant the blush of shame to an American's face. Here was a great January 19, 1926, and the physical property turned over to it. railroad company, which ought to be outside this contest, ought to have nothing to do with it, ought to have no The judge in his decision quotes a good deal of the testi­ interest in it. We find from the evidence, however, that mony, upon some of which he bases the conclusions which I there was some coordination between the Power Trust and shall read. the railroad company. The general superintendent gave This contract was negotiated by Byrd. The defense this information, and, as they said- claimed in the suit that he had no relation to the power He was very helpful to us. company. The judge found he did have, and that they furnished the money for the bribery. Byrd was represented That means to the Power Trust- by an attorney by the name of Rankin. It will be noticed He was instrumental in getting us the power contract with 'the as we go on that some of the testimony relates to McKenzie. shops at Paris, and is otherwise very friendly. That is another city in Tennessee, between Paris and Mem­ What kind of a government is it in which railroads and phis, which the same power company took over through the Power Trust officials can combine in this way to help each instrumentality of the same man, Byrd. It will be explained other out of difficulties, to the detriment of the common as the testimony is developed. people of the United States? What does it mean when After giving considerable of the testimony the judge these high officials undertake to charge the toilern of Amer­ quotes as follows: ica an exorbitant price for gas and electricity because it is Q. How much did he say that he gave Mr. Dunlap? necessary to use the money in making the various combina­ tions and buying out and driving Government and State Let me here digress and say that Dunlap was the man officials into doing their bidding? Is it not a sad com­ who put over the McKenzie job and not the Paris job. He mentary that there should be a general tendency on the part comes into the evidence in the Paris case only incidentally. He got $2,500 for putting over that job after another man of these great institutions to help each other out of dis­ had tried but failed. honorable, disreputable, and dish~:mest difficulties? The writer of the letter goes on: Q. How much did he say that he gave Mr. Dunlap? Mr. PORTER. Now, 1! Your Honor please, I would like to state The real seat of the trouble at Paris lies in the lease contract, that just as he put it. which was so complicated the ordinary citizen could not under­ The COURT. That is the only thing you can do. stand it; and there was a growing belief that in some way not A. He told me Mr. Dunlap was paid $2,500 and that that pay­ explicable the city would finally get a sum considerably less than ment had nothing whatever to do with the deal at Paris. That $400,000 for its property. _ _ was in connection with the deal at McKenzie. I feel we will finally make some settlement with the city that Q. Did he state what services Mr. Dunlap rendered at Mc­ will even be better than the present contract. Kenzie, Tenn. ?-A. No further than this. He stated to me that he And there is not any doubt that they would have done so had tried to put over a deal for the water and light property at McKenzie, and the way he expressed it, " it would not stick ", and if they could have kept on buying city officials, as I shall that Mr. Dunlap later went on the job and put it through. show later on they did in order to get the contract in the first place. I shall show that by the judge himself, who The man testifying is Byrd. said this contract evidently was purposely made so that no Q. And that he got $2,500 for that?-A. Yes, sir; that is what I understood. ordinary citizen could understand its intricacies and its Q. How much did he say Mr. Fryer got? technicalities. Yours very truly, Let me explain to the Senate that Mr. Fryer was the attor­ H. D. FITCH. ney of the city of Paris, their regular attorney. They paid him $1,200 a year to act as their attorney, and he was the He is the chairman of the local subsidiary in Paris, or man who, the judge said in his decision, was bribed. So he was at that time. is talking Paris now. The facts of the case at Paris are that after the officials of the city of Paris had sold the municipal light plant to the Q. How much did he say Mr. Fryer got?-A. He said his infor­ mation from Mr. Rankin was $2.000. He told me he put that Power Trust, and after the trust had been operating it for much in Rankin's hands. I think Rankin was the one. sometime, after new officials had been elected, the people of the city discovered that their officials had been bribed, and That is the $2,000 which the judge afterward found, not they commenced an action in the state court to set aside only from this evidence but a great deal of other evidence, the sale on the ground that it was brought about by fraud. was paid to Fryer. In fact, it was undisputed. It is a pe­ Immediately that case was taken into the Federal court. If culiar thing in this case that even the defense admits that the Johnson bill as it passed the Senate, and as it is now they paid to this man Fryer $2,000. They said there was pending in the House of Representatives, had been on the nothing wrong about that, even if he was the attorney for statute books when this occurred. they could not have taken the other side. the case into the Federal court. They would have been I read further: compelled to stay in the State courts of Tennessee. But this Q. How much did he say Mr. Hogan received?-A. He told me corporation was a nonresident defendant; it was not incor­ he put between seven and eight hundred dollars in the hands of porated in the State of Tennessee; hence, under the law as another party, who paid it to Mr. Hogan. Q. Mr. Hogan, I believe, is the foreman of the L. & W. shops it stands now, and as it stood then, they immediately took at Paris? the case away from the State court and went into the Federal court. . It was necessary to buy Mr. Hogan, or impartant, at least, The case was tried in the Federal court before the United to buy Mr. Hogan, because he was foreman of a lot of men States district judge, Judge Anderson. I have in my hand who worked in the shops, and this man says: his decision. The whole of the. decision is interesting read­ A. He told me he put between seven and eight hundred dollars I In in the hands of another party, who paid it to Mr. Hogan. ing, but shall read only some parts of it. explaining Q. Mr. Hogan, I believe, is the foreman of the L. & . W. shops the suit, in the beginning of his decision, he said: at Pa.ris2 5854 CONGRESSIONAL RECORD-SENATE APRIL 2 That means the Louisville & Nashville shops, the superin­ of the city of taxes on the plant. Thus the consideration is tendent of which gave the information the man who really the assumption by the defendant of $355,000 outstanding to bonds falling due over a period of 30 years and the payment of wrcte the letter which I have already read. $45,000 in 30 years when the property is transferred. On a basis Q. Mr. Hogan, I believe, is the foreman of the L. & W. shops at of present worth, of course, these amounts are far below their Paris?-A. Master mechanic. face. The property itself, the record discloses, is worth at least Q. Do you know whether or not more members of the legisla­ $500,000. tive council work under Mr. Hogan?-A. Yes, sir. Q. Name the ones who are employed under him.-A. R. E. Han­ So, after all, they were getting something for very much cock and Mr. J. P. Gorman. less than it was worth; they were getting it for $100,000, or Q. How did he say that this transaction with Mr. Hogan took perhaps $200,000 less, or even more than that, below the place? Did he say that payment was in cash or how?-A. I don't recall whether he said it was cash or not. He told me there was value of the property at the lowest valuation. a man with him that had formerly been in the employ of Mr. This court finds no laches on the part of the complainant. As Hogan over there, and that he gave this money to Mr. Hogan to promptly as possible after the discovery of the transaction with be used to take up a note of some kind. I don't know whose note City Attorney Fryer this suit was begun. The record discloses it was or anything about it. clearly ~hat the city council was not informed of this arrangement Q. Did he say anything about the note being worthless?­ for an mconsistent fee to Fryer. It is true Rankin testifies that A. Yes, sir; he expressed the opinion that the note was of no value. the proposition to Fryer was based on knowledge and acquiescence Q. Did he make any further statements to you at the time?­ on the part of the mayor and council, but Rankin makes no A. We had quite a long conversation there, but that is about all claim that this acquiescence was obtained. That part of Rankin's I can recall that came up about this matter. testimony bears all the earmarks of afterthought. Arnett, the mayor, says he knew of the transaction and expressed approval Then the judge who said in his opinion: · of it. If Arnett is telling the truth, which the court doubts, he The record shows that Mr. Fitch, the president of the defendant, certainly did not communicate this remarkable transaction to the visited Paris in October 1925 and inspected the physical properties council. of the Paris Light & Water Plant. He denies this in his testi­ In no sense ts the defendant in the attitude of an innocent mony in the present suit, but he so testified in the previous suit third party and purchaser for value. The defendant was the between the city and the defendant. principal in this shady transaction and Byrd was clearly its agent. His agency is not even cleverly concealed. There was another lawsuit, in which this man testified The question of the power of the city in this case to lease or also, and he testified one way in one suit and the other way sell ~ts municipal plant is not necessary to discuss or determine, in view of the conclusion of the court that this transaction is a in the other suit. So the judge drew his own conclusion as typical case of a contract based on an inadequate consideration to which statement was true. and obtaine'cl by fraud. The judge said further on: The company, did, however, on taking control of the property, Before the contract was adopted by the city council on the eve­ expend considerable money in improvements. It installed an ning of the vote, Byrd either read the whole contract, or the salient alternating-current system, put up new poles, rewired the city parts, to Fitch over the telephone. and outskirts, and extended the service. For this, if the contract is canceled, the defendant should be reimbursed. The amount can This becomes important to show that Byrd was actually easily be ascertained by a reference. the agent of the defendant, and on the night when the town The suit now pending between the city of Paris and the defend­ board put that matter across Byrd read the proposed con­ ant in the State courts- tract over the long-distance telephone to Mr. Fitch, the There was the other suit which I mentioned- president of the Associated Gas & Electric Co., who was at should be dismissed by the city. There is no inconsistency in the New York City. position of the city for the reason that the previous suit developed the facts on which the suit for the cancelation of the contract The judge said further: is based. The dominant influence for the adoption of the contract in Paris, the record discloses, was J. H. Dunlap. Dunlap largely I might say the other suit was in relation to the contract drew the contract, visited Fitch- in question. It was commenced before the city had knowl­ That is, the president of the power. company- edge of the fraud. There was a misunderstanding in the at Bowling Green, and went over all the details and discussed its construction of the contract and the city sued the defend­ terms. The court gathers that Mr. Dunlap was the power behind ant. The suit was with respect to some water fountains. It the throne under the Arnett administration. had nothing whatever to do with the case we are discussing. Arnett was the chairman of the board at Paris. In the case that had been tried the fact of the bribing of the public officials had been brought out, and when that was After the deal was closed Mr. Dunlap received a fee of $2,500 from the defendant for acting as a.gent for it in the purchase of brought out, suit was commenced to cancel the contract. the power plant at McKenzie. This. court finds- So the court draws the conclusion that he was, as the Here are the findings of the court that tried the case-­ court says was disclosed from the evidence offered, the First. That Byrd was the agent of defendant. power behind the throne. The court further says: Second. That the contract was obtained by the bribery of Fryer, Arnett, the mayor, received a job from the Paris plant, which city attorney, of Paris, Tenn., through the agency of Byrd and he held for some 9 months. These are matters which of them­ Rankin, his attorney, the means therefor being provided by the selves are perhaps of no great weight, but have some significance defendant-- when taken into consideration wiLh the corruption of Fryer, the That is, the power company- city attorney, and other indicia of improper influence. and by other corrupt and unethical practices. I might say that the evidence discloses that in the Paris Third. That the consideration for the lease and sale contract case Mr. Byrd or Mr. Rankin-I have forgotten which­ was inadequate. Fourth. That the contract should be set aside and canceled, and made a cpntribution to the building of a church. A church the property involved returned to the complainant herein, on the was being built in that town at that time, and he gave a reimbursement to defendant of the amounts spent in improve­ note for $500 toward the building of it. He did not live ments and the repayment to the defendant of the $25,000 spent by there. He had no interest in the churches there. There it in taking up bonds of the city. Let a decree in accordance with the above be drawn and entered. was no reason why he should contribute, but he gave a note H. B. ANDERSON, for $500 to be paid in case the deal went through, and if the United States District Judge. deal did not go through the note was not to be paid. That incident goes to show how this "religious" power company, Mr. President, I know power companies will say that case was appealed by the power company. It was appealed and anxious to build churches all over the United States, was reversed. After the contract was made, and before the cor­ anxious to make a contribution to a church in Paris, Tenn., rupt acts were discovered, the Legislature of Tennessee if the deal went through, and no contribution if the deal did not go through. passed an act validating the contract; not only this con­ I will read further from the statement of the judge: tract but several others of a shady kind. That action of the • legislature was one reason why the case was reversed. An­ The contract itself is misleading to an ordinary citizen. In it other reason was that when .the case came on for trial, citi­ the defendant appears, at first glance, to pay an annual rental of $30,000. But on examination this is offset by the amount of zens, taxpayers of the city of Paris, were taken in as parties the interest on_the outstanding bonds and also by the assumption plaintiff. The lower court held that as to the defendant the 1934 CONGRESSIONAL RECORD-SENATE 5855 district court did not have jurisdiction. Whatever wrong Mr. MARTIN J. INSULL, Middle West Utilities Co., 20 North Wacker Drive, there was in the case had been forgiven, anyway, by the Chicago, Ill. action of the Tennessee Legislature. DEAR MR. lNsULL: Our client- Mr. President, that causes me to wonder. Why did this power company, if it had an honest, valid contract, go to This letter was written by the attorney for the Associated the Legislature of the State of Tennessee and get the legis- Gas & Electric Co.- lature to pass an act to validate the contract? The legisla- Our client, the Associated Gas & Electric Co., thought so favor· ably of your recent statement made at the Institute for Public ture validated several contracts, of which this was one. I Affairs at Charlottesville, Va., that we had excerpts from it, as wonder if the power company had in the Legislature of the they appeared in the Wall street Journal, inserted as an ad­ State of Tennessee some attorneys planted, like they did in vertisement in newspapers published in the territory served by the the State of New York, as disclosed by the letters of State pr~~~t~~~t~~1;1;: ~~~~n~~ of much value to the industry as a Senator Thayer. I wonder if the power company was able whole. rt is, I believe, the best one that I have seen setting forth to get this law through the Legislature of the State of Ten- the functions of the utility holding company- nessee by honest means. I wonder if honest men in that Now bear that in mind; he is defending the holding com- legislature were not deceived as to the facts in the case. I panies, and he has obtained the idea from Mr. Insull­ wonder also why it should be necessary to have the State in promoting the utility industry and increasing and improving legislature validate the act if the act was all right within .service to the public. itself. Believing that it was desirable to give it wider distribution, we Anyway the circuit court of appeals reversed the deci­ have taken the liberty of Teproducing it in the local territory served by the Associated System companies without taking it up sion. They did mention the fact of the bribing of Fryer, specifically with you. but they said he was only the attorney; he did not have a For the obvious reason of avoiding criticism on ·the part of the vote anyway; and they did not seem to think his actions stockholders of the company, many of whom still think- were very bad. I believe every honest individual who knows Listen to this- anything about the case will agree with Judge Anderson that many -of whom still think that there is strong rivalry between the buying of the attorney for $2,000-he was getting $1,200 utility companies. from the city-should in itself justify the setting aside of any contract that he made or that he advised. It is true he Let me read it again: did not have a vote, he was not a member, but he was there For the obvious reason of avoiding criticism on the part of the when the act was passed. The evidence shows indisputably 11tockholders of the company, many of whom still think there is strong rivalry between utll1ty companies, it was thought necessary that he advised its passage. to omit mentioning your name. So I simply want to call attention, as we are going along, to the fact that the Power Trust is not acting in New York Insull represents one bunch of thieves and the writer of alone. When we have read the letters of Senator Thayer this letter represents another bunch of thieves, and their and get an idea of what is going on in the New York Legis- stockholders, who are innocent, whose money they are using lature, let us go down to Tennessee, and go to Paris, and go and whose money Insull squandered, were laboring under the to McKenzie and see where the same thing was openly at- terrible delusion that there was some rivalry between Insull tempted, and where it was found by the judge that Mr. Fryer, and the Associated Gas & Electric Co. the city attorney, was bribed by the payment of $2,000 of Mr. BONE. Mr. President-- Power Trust money. Mr. NORRIS. I yield to the Senator from Washington. Incidentally it -comes out that the same people paid Dun- Mr. BONE. A great many of us are wondering why it lap, whom the judge says was the power behind the throne would seem necessary to have a code of fair competition be­ in McKenzie, $2,500 for putting through the bill. So New tween electric companies when there is not any competition York must not boast of being the only State where the Power anywhere in the United States between those outfits. I Trust is thus active and where citizens may obtain money wonder if the Senator had thought of the rather amusing from it. The evidence shows that in one of these cases, spectacle of a code of competition being organized under the either that of Dunlap or Fryer, Byrd had in his possession N.R.A. between outfits of that character? from the Power Trust $3,500 with which to bribe attorneys, Mr. NORRIS. I do not care what kind of a code these and it only cost him $2,000 to do it. I have been wondering companies have; but the only thing that interested me when ever since I read it what Byrd did with the other $1,500. I they were talking about the code was that they ought to have been wondering whether the attorney who took a bribe leave out of that group all of the municipally and publicly of $2,000 when he might just as well have had $3,500 could owned corporations that are producing and selling electricity. not sue the power company and get the balance of his Mr. BONE. I think, of their own volition, they are smart bribery fee. enough to stay out. Let us take another view 6f the activities of these power Mr. NORRIS. Yes. He did not want to use Insull's name interests. The power companies of which I have been because it might spoil the beautiful illusion their innocent speaking are not part of the Insull group, but I want to show stockholders had that after all there was competition be­ the Senate that it is just the same as though they were. I tween these great men. so he said- want to show the Senate how cleverly these companies are It was thought necessary to omit mentioning your name. stock­ deceiving the people in order to make them believe that there holders might regard it &s advertising a rival company at their is some competition between the Insull group and the expense. Some stockholders criticize any expenditures for adver­ Byllesby group and the Stone & Webster group and the tising. These, however, are relatively few, so that they can be ignored. We want, therefore, all expenditures for advertising as Associa t ed Gas & Electric group. Here [exhibiting] is a free from criticism by stockholders as possible, particuiarly 1n letter which the Federal Trade Commission secured from view of the depression in the prices of stocks, which makes them their files. If Senators themselves would like to look it up, unusually sensitive. they will find it as exhibit 5715 in the Federal Trade Com- Local publication of this advertisement has elicited considerable favorable comment and hence we have felt that a wider publics.­ mission's investigation. It is a letter written September 12, tion of it would be desirable. Before doing so I would like, how- 1930. It is addressed to Martin J. Insull Utilities Co. The ever, as a matter of courtesy, to secure your permission. I am other Insull-Samuel Insull-according to what the morn- enclosing a copy of the advertisement from one of the local news­ ing newspapers say, is now "frying" in Greece, but still is papers in which it appeared. not in Greece. This letter is to his brother, who is now in We -should like to publish this advertisement in the newspapers of the larger cities in which we customarily insert advertisements Chicago, having been induced or compelled to return from for the Associated Gas & Electric System. I shall greatly appre-_ Canada back to Chicago to answer some court charges after ciate your permission to do so. a legal fight lasting some 17 months in which the United Yours very truly. States was trying to have him come back. Finally he came I The letter is signed by Daniel Starck, who was the attor- back, and he is there now. ney for the company. 5856 .CONGRESSIONAL RECORD-SENATE APRIL 2 I thought I had the answer here, but I do not seem to have capital upon which they will have a right to receive a rea­ it. It is sufficient, however, to say, Mr. President, that Mr. sonable return as long as time lasts. That is one of the Insull's attorney wrote and said that he had submitted the great evils of the institution. letter and the request to Mr. Insull and Mr. Insull had con­ Mr. President, if the Johnson bill, which has passed the sented to have the Associated Gas & Electric Co. use the Senate, should pass the House of Representatives, where it advertisement as theirs and not use his name. is now pending, what happened in McKenzie, Tenn., and · I presume now, since Mr. Insull's experience in Canada what happened in Paris, Tenn., could not again happen. It and his brother's experience over in Greece and on the would be necessary for the courts of Tennessee to pass on Mediterranean, that they would consider it a great honor the matter and the Federal courts would have no jurisdic­ to have his name attached to it. However, I want to call tion whatever. attention to this Insull address to which reference was But it is not only in Tennessee, Kentucky, and New York made in the letter. It is quite a long address and very that such things are happening. In Texas the people have interesting reading on the subject of holding companies. had the same experiences. I have here a dispatch, and I Here is the conclusion of it. Mr. Insull says: know nothing about it except that the dispatch itself is Regulation of the operating company with freedom of the hold­ published in a newspaper. The dispatch reads: ing company 1s to the best interest of the public. While some courts have taken a cue from the new deal and rendered decisions in line with human rights, a Federal judge of Get that-regulate the operating company, that is the the northwest Texas district stlll thinks in the old terms. company that makes the "juice", but let the holding com­ Recently he granted a permanent injunction to the Community panies, which are piled one on top of the other almost with­ Light & Power Co. restraining the city of Plainview from going ahead with the construction of its own electric light and power out limit, be free of regulation. That is Insull's doctrine, plant. and that is the doctrine that has brought down to despair and ruin millions of honest investors in the Insull properties. There is the case of a city which decides it wants to That was the doctrine the Associated Gas & Electric Co. build its own electric light and power plant, but the Federal wanted to use as an advertisement, but they did not want judge intervenes and takes jurisdiction. I presume he has to use Insull's name, and he consented that they -should jurisdiction because the plaintiff is a nonresident of the use it without his name. They did use it, and this is part State of Texas. If that be so, the passage of the Johnson of it: bill through the House of Representatives would remedy Regulation of the operating company with freedom of the hold­ the situation. ing company is to the best interest of the public. The public A Federal judge issues a permanent injunction and says, is thus protected against monopoly- in effect: "You shall not build a municipal power plant ! can imagine how they laughed in their sleeves when to make your own electricity, because here is a company they read that-- known as the ' Community Light & Power Co.' which has issued bonds and is prepared to do business of that kind, and and has the advantage of the initiative and enterprise that financially strong private business brings to institutions where if you fool cities go into the business yourselves, what will its money 1s invested. become of the bonds the power company has issued? " Regulate the operating company, but do not touch the The newspaper item to which I have referred continues: holding company. That is what has brought ruin and de­ The judge ruled that inasmuch as the power company was the holder of $8,000,000 of bonds of the Texas Ut11ities Co., serving 52 struction all over the United States to millions of honest South Plains towns, its property rights would be infringed by the investors, including, Mr. President, "widows and orphans." building of the Plainview municipal plant and that it should not While I think of it, there is one thing that escaped me, build the plant. and I want to recur to it for just a moment. It has to do In other words, if I understand the situation correctly, with Tennessee. I hold in my hand exhibit 5775 from the here is a power company operating in 52 different munici­ Federal Trade Commission's investigation. It is a report palities. In that vicinity is a municipality which is desirous from their examiner on the McKenzie, Te~ investigation. of building a municipal plant. The Federal judge says, It repeats the evidence I have already read-and I will not "You cannot do that because the private company which is read it again-about Dunlap getting $2,500 for putting that supplying these 52 cities and towns and villages will be bank­ deal through, but the man who makes the report says: rupted if you go into that kind of business, and the poor When examining the accounts of the Kentucky-Tennessee Light bondholders, the "widows and orphans", will lose their in­ & Power Co.- vestment in private companies", as they have done in most That is a subsidiary in this ease- of the Insull companies. l found that there was an item of $2,000 paid to R. L. Dunlap- The disclosures that have been coming out from day to day before the Federal Trade Commission are not confined There is confusion there. The evidence shows he got to New York, Texas, Kentucky, and Mississippi. Following $2,500, but the books show the company only paid him right on the heels of this case comes Oklahoma, where they $2,000. have a somewhat similar situation. In the case of Okla­ When examining the accounts of the Kentucky-Tennessee Light homa an attorney named Campbell Russell was fighting to & Power Co. I found that there was an item of $2.000 paid to R. L cut the rates charged by the Byllesby subsidiary serving .Dunlap, which has been carried in suspense and was transferred to fixed capital in July 1926 " on McKenzie purchase." Oklahoma City, according to letters unearthed by the Fed­ eral Trade Commission. They came from the Insull files. There is $2,000 that the people of McKenzie now have in The Insull Co. put him on its pay rolls at $5,000 a year the capitalization of the company, $2,000 transferred to while the Byllesby interests, the letter said, agreed to pay "fixed capital", $2,000 of bribery money that became a part three fourths of his salary. That is another case where of the valuation of the property upon w:ttich the people of the great Power Trust representatives are making the people McKenzie will be paying a return throughout all time. It believe they are in competition, when there is no such thing is such " investments " that injure not only the present · as competition. generation but generations that are yet unborn. "Fixed capital'', $2,000 of which is admitted in the report to be Letters have been brought to light revealing the Oklahoma situation. They were fished out of the files of an Insull bribe money! company's office in a cellar in Oklahoma City since the At Conowingo, not far from Washington, a lot of neckties Insull crash. The man who fished them out was McDer­ were capitalized, but that is not so bad as bribery. Here a mott, one of the examiners and investigators of the Federal man was bought, and I suppose in the Paris case the same Trade Commission. The article proceeds: thing was done. The city attorney was being paid by the other side, and the Power Trust paid him. too. They paid Earl R. Ernsberger, president and general manager of the Insull property, Southwestern Light & Power Co .. wrote on January him $2,000, and if they followed the same course they 17, 1927, to W. C. Sharp, of Chicago, an operating vice president charged that to "fixed charges" and made it a part of the of Insull's Middle West UtWties Co. that Russell had been hired. 1934 CONGRESSIONAL RECORD-SENATE 5857 The letter said: It seems to me, go where we will, today or yesterday, or at " You wm recall that I wrote you and also talked with you any time, that we will find the same thing, the same men about the possibility that I should be able to arrange for the employment of Campbell Russell by the utilities association, hesitating at nothing. They hire men who are professors thereby stopping the prosecution of the suit for reduction of in colleges. They hire lawyers who represent cities to take rates against the Oklahoma Gas & Electric Co. in Oklahoma City their cases. They hire legislators who are chairmen of before the Corporation Commission. committees. They hire everybody and anybody who in any "I had several conferences with Mr. Russell and he was so thor­ oughly sold on the Southwestern Light & Power Co., its policies way can do anything to influence and deceive the people as and reputation, that he insisted that he would rather go to work to the real purposes of their organizations. for them. Therefore I have hired him. As these letters show, these concerns seek to deceive even " His salary will be $5,000 per year-the Oklahoma Gas & Electric their own stockholders. The Associated Gas & Electric Co. Co. has agreed to pay three fourths of his salary. I have arranged also with the Oklahoma Utilities Association that Mr. Russell be asked Mr. Insull to let them publish his statement as an transferred to that association in the next 3 or 4 months. advertisement without using his name, because they feared "I think it best to handle it as we are for the reason that direct that the use of his name might lead to the conclusion that connection with the association at this time might injure the there was some combination between these two great com­ utilities' standing with the legislature that is now in session." panies. If they omitted his name and published the state­ I hope all Senators get that point. Mr. Ernsberger hired ment as their own, there would not be anything of the this attorney for $5,000 a year, but he had him transferred kind. These concerns have advised the people that we temporarily to some other company and not to the company should let holding companies alone; that we should not that hired him for fear publicity of that fact might injure interfere with these great institutions that have covered the the standing of the power company with the legislature of United States like a blanket from one end to the other. Oklahoma, which was then in session, and would cause the They have accomplished that. Some of their houses have legislature to reach the conclusion that the power company fallen down. Insull has made a failure. He is trying to had bribed this attorney, who theretofore had been before escape the clutches of the law of the very country under the legislature fighting for the reduction of the rates of these whose laws he built up a mighty empire of deception and corporations. deceit. He is trying now to avoid just punishment for his The letter says further: sins. He is using money, undoubtedly, to bribe foreign "You may know that we are working very hard to prevent the officials, and to charter steamers, and to hire lawyers in repeal of House bill 4. London and New York and all over the world-money that "I think we have performed a mighty good service in getting was contributed by pennies by the student who uses electric Mr. Russell out of the work he has been doing, for that (the) rea­ light, by the washerwoman who uses electricity to operate son that it would have spread from the 0. G. & E. case in Okla­ homa City••- her machine. He has deceived the American people. He got their hard-earned cash, and now he is defying the laws That is the case of the Oklahoma Gas & Electric Co.­ of his country. He is an outcast. He is like Benedict .. to other parts of the State at sometime in the early future." Arnold of old in that he has no country. He is a man Now let us see what this other company replied. Let us without a country, trying to escape just retribution. see what Mr. Insull's company said to that. Here is the I have no patience with the man or the woman who writes reply. The first letter was directed to Mr. Sharp, and the continually, as they do, to Members of the Senate and says, reply came from Mr. Sharp, the vice president of Insull's "Do not hurt these investments. I have invested my all in company. He said: some utility company." It may be an Insull company, where I showed your letter of January 17 to Mr. Insull and he was everything is gone. It may be one of these other companies very much pleased with the arrangement that has been made, but that ought to go. It may be one of these companies most of suggested that perhaps we were asking the Oklahoma Gas & whose capitalization is" water." The records of the Federal Electric Co. to bear too much of the burden. Trade Com.mission will show that since they have been in­ He was quite liberal-quite liberal. vestigating-and they are not through yet-they have found I told him I would take this matter -up with you and see how over $1,000,000,000 of" water" that has been poured into the you felt about it. He did not feel that our other companies in capitalization of these electric companies. Oklahoma should share in this expense for obvious reasons. How long will the American people continue to stand for Mr. President, again that goes to show that while these this deception? How long will we continue to be deceived? corporations pretend to the people that they are in competi­ How long will we continue to permit the def eat of bills for tion with one another, behind the scenes they are making the regulation of these great institutions that are deceiving these arrangements, bribing public officials, hiring lawyers the people? How long will it be before we will confine them who have been on one side of a case to take up the other to one court instead of two courts? How long will it be side, deceiving the people as to apparent competition when before the American people will wake up and demand that there actually is none, working together hand in glove, to their Senators and their Representatives pass laws that will the deception even of their own stockholders. There is make it impossible to give to these companies, in the arena nothing honest, nothing ethical, nothing fair, nothing hon­ of our courts, a favored position? How long will it be before orable about their conduct. we can drive them to the point where they will get justice Up in New York the condition is just the same. Down in and nothing more? God knows it is justice they fear. It Kentucky and Tennessee the corporations are doing the is justice from which they are trying to flee, as Insull today same thing. Down in Oklahoma they are doing the same is trying to flee from the officials of his own country. thing, and down in Texas the same thing, and the evidence THE GERMAN DEBT of the past shows that in the past they have done the same Mr. LEWIS. Mr. President, I am sure the Senate always thing. One or two or three of these great corporations hav& finds entertainment and instruction in any address deliv­ controlled the legislatures of dozens of States. ered by the able Senator from Nebraska [Mr. NORRIS]. In I am wondering, now that we have read the letters of this the past few moments he has illumined the Senate with a State senator of New York, if the people of the country are revival of knowledge of the manner in which legislation in not wondering whether these corporations do not have their different parts of our country has been either influenced by keymen planted in every legislature in the United States. power or controlled by corruption. I am wondering if the people are not wondering whether My object in rising at this time is not to address myself some of their keymen are not planted in the Congress of to that subject; but I desire to pay the Senator from Ne­ the United States. I am wondering what legislative body is braska the tribute of assuring him that he does a service to free from their influence. I am wondering where their dis­ the country when he constantly revives the intelligence as honor will end. I am wondering if their dishonorable and well as the vigilance of America to confront these great disreputable practices can be exaggerated, or if they can be wrongs, and prepare to overthrow them or to be overthrown properly described in the English language. by them. 5858 CONGRESSIONAL RECORD-SENATE APRIL 2 Mr. President, I desire to call the attention of my eminent or any form of cancelation, of the money debt due by such colleagues to a statement cabled abroad as it came from the country to the United States, such an assumption on the part State Department this morning and Saturday, being the re­ of that foreign country, be assured, is an illusion, without sponse of the Secretary of State, the Honorable Cordell Hull, foundation, and serves merely to deceive itself. in reply to solicitation which came in the form of an official The Congress of the United States sometime past voted letter from the financial section of the political department an expression against the cancelation or limitation of this of Germany. indebtedness after we had granted to these foreign debtors It appears from the public records-as to which I have a very large sum off of their debt, either as interest which some other information besides merely that which the press was due or as part of the principal that was yielded. That affords-that Germany tendered to our Government a small act of Congress is the sovereign expression of the people of sum upon a debt that is overdue, and assumed to tender this the United States. It is voiced through their deputized sum upon the theory that it could be accepted as a compro­ agents. It is expressed on the part of both their licensed mise by the Secretary of State as our officer of foreign affairs, and their trusted agents in the legislative halls. and that in the acceptance of the sum tendered the debt or There has not been at any time any justification for the obligation of Germany could be wiped out as a subject fore­ charge made in different quarters that it was the intention closed by arrangements between the Secretary of State act­ of the President or of the present administration to ignore ing for the United States of America and the fiscal officer that act of Congress, or to be indifferent, far less from being who served as the representative of Germany. defiant, to its declaration. In the response by our Secretary of State he makes it very If the Congress shall find it agreeable to give to the Presi­ clear that it is not in the power of the executive department dent of the United States some specific agency for the to make any compromise touching the debts of the foreign negotiation of some principle of commercial reciprocity, it countries due to the United States, and I particularly am will be based upon such return to the United States of off er glad to see my eminent friend the senior Senator from or enjoyment of commercial privilege as will be assumed Indiana [Mr. ROBINSON] in the Chamber, knowing his solici­ will equal that which we give, but under no circumstances tude in this matter, so that I may call his attention to the will such be tendered as a consideration. nor would such be fact that in this communication of the Secretary of State is accepted in exchange for the violation of the act of Con­ the official declaration that it is only by Congress that an gress respecting these debts and the obligations put upon adjustment, in the form of compromise or liquidation, can the debtors by the expression of Congress in its legislative be made by this Government with any foreign government enactment. as to the debts of which we speak as the foreign debts. Mr. President, there ls never a time, certainly there is not Mr. President, I am moved to impose myself upon the Sen­ now, when it can be assumed that the people can be ig­ ate at this moment to invite to its attention the fact that nored, their voice and command wholly violated, by an the offer of Germany would never have been made to the Executive in power to whom no such privilege has been United States of America in the manner as suggested had granted by the ballot box through the expressions of the there not been read in the press the statement, cabled to the people themselves. No President of the United States, in foreign land, that there was some movement afoot in Amer­ obedience to the Constitution and in compliance with his ica for the President of the United States to settle the debts solemn oath, will be found violating the act of Congress between the United States and its foreign debtors through that commands a duty respecting the debtors or ignoring, some power which the President himself had, or which it and certainly never treating with defiance, the legislative was assumed was to be vested in him by Congress. body. I take it that these publications have been occasioned by If the time should ever come when any President would the expressions here and there, sometimes by eminent Sen­ assume to set the example of dealing with a foreign coun­ ators on this floor, and sometimes by public press, and some­ try in defiance of an act of Congress or the will of the times by those who have been expressing a fear, that there people, then that President would be violating his solemn was a move afoot to vest in the President of the United oath. He would not only be disobeying the law, but he States the power to negotiate a compromise or a settlement would approach the realm of what could be called " political of the foreign debts with our foreign debtors, as something treason." Such a thing could never be done by a man of of a consideration for these debtor countries yielding to the such spirit as the present President, and would never have President his request for reciprocity in the form of some been attempted by any other President who has served in tariff concession, or as compensation for the surrendering that honorable capacity in the lifetime of any Member of by the foreign nations of their tariff policies which hereto­ the present Congress. fore have reared barriers against American products. Whatever may be said of Presidents respecting their dif­ Mr. President, I am wholly satisfied that there never has ferences on what we may call " politics '', there has never been, in the mind of the President, a purpose to submit to been a man who held that high office, selected by the peo­ any foreign debtor a proposition of either limiting or cancel­ ple of the United States, and serving under his solemn oath, ing the debt owed the United States as a consideration or who would have descended to actions such as it is being exchange for tariff privileges or trade treaties, as may be intimated here and there throughout the country it is the called for in the new process indicated in the bill tendered purpose or is to be the purpose of the present President of this morning by the eminent Senator from Mississippi [Mr. the United States to perform. HARRISON J, the Chairman of the Finance Committee. Mr. President and Senators, it is unfortunate that there Senators may take from me the statement that I am should go forth a publication to the countries of the world speaking with some small authority when I say that the that the Congress of the United States had lost confidence question of the foreign debts, their qualification in amount, in the great Executive of any political party to such a degree the change in the contract of payment, the assumption of that we were charging among ottrselves as accusations that any cancelation, have never been at any time proposed by he was on the eve of taking to himself a dictatorial power, the Secretary of state to any country or by the President usurping the will of the people on the one hand and violat­ to the Secretary of State to be communicated to any country ing his solemn oath of duty on the other. It is that sort as a basis, in any form whatever. for exchange for economic of thing that will bring to us the accusation, such as we privilege or tariff trade treaty. have heard in general rumor, of the Government being de­ I now add as a serious and purposed statement from my spoiled by those who assume, under the name of com­ place as one of this honorable body, as a Senator of my munism or anarchy or any other name. to overturn the country, and one of the voices of my distinguished State, institutions of the United States. that if any nation now a debtor to the United States of There would be a great deal of foundation, my brother America is assuming that trade privileges or trade exchanges Senators-I might go further, and say justification-for any resting upon the basis of commercial reciprocity are going to set of men to assume that they would be welcome to under­ be tendered in exchange for either qualification, limitation. take the overturning of the institutions of our country, if 1934 CONGRESSIONAL RECORD-SENATE 5859 there had ever been set the example of a President of the STRENGTHENING OF PENAL LAWS-RECONSIDERATION United States, without authority from the legislative body, Mr. ROBINSON of Indiana. Mr. President, last Thursday assuming to deal with foreign nationalities in respect to the Senate passed unanimously and without opposition two their obligations to America, by either consenting to the bills on the calendar. One was Senate 2248; the other, Sen­ qualifications or limitations of their obligations in return for ate 2249. Representatives of the American Federation of the support of some political policy in behalf of that Presi­ Labor informed me this afternoon that both bills might be dent, and that in disobedience to the laws of our land and very discriminatory against labor in this country, and that in defiance of the will of its legislators. they wanted to be heard respecting them. They said that Mr. President, there is no foundation-there has never labor had no opportunity to be heard before the committee been any-for any intimation that could inspire the fear that which considered the measures. In order that they may such action ever could have been taken by this President, have such an opportunity, Mr. President, I am entering a surely, and it never could have been approved if taken by motion to consider both bills, if such a motion be in order. al1'y President, because should such act ever be undertaken, The PRESIDING OFFICER (Mr. COPELAND in the chair). this body would overturn it by an expression that would be The Chair is advised that the bills have already gone to the constitutional on its part. House. If there be abroad in the land of the debtor the idea that Mr. ROBINSON of Indiana. In that event, Mr. President, the President of the United States is about to move to can­ I assume that a motion to reconsider could be entered, and I celing their debt, to qualifying their debt, to limiting their assume another motion would be necessary to recall the bills debt, as a consideration for the giving to America of some from the House, or request the House to send the bills back form of treaty or contract as to commerce and tariff, let that to the Senate. idea at once be abolished, let that delusion be thwarted promptly, and let that impression evaporate from the minds Mr. ROBINSON of Arkansas. Mr. President, I inquire, of those who are our debtors abroad. Let their eminent What is the subject matter of the bills? statesmen be convinced that no such treachery could live in Mr. ROBINSON of Indiana. One, Senate bill 2249, is the bosom of any American President, and no such supine known as the " telephone and telegraph bill." The other. cowardice could ever prevail in the legislative body as would Senate bill 2248, has to do with the protection of trade allow such conduct by any President, whatever the political against interference by violence, threats, and so forth. I name he went by, or under whatever designation he assumed understand that labor's position in the matter is that labor to act. might be prevented from protecting itself if the measures, as Therefore, Mr. President, at this particular moment I they are written, should be passed. arose to express the fear that publications such as led Ger­ Labor wants the opportunity to be heard by the committee. many to assume that there was an authority already vested Should the bills again be placed on the calendar, labor might in our Secretary of State and in our President to ignore the be given the opportunity to be heard and to suggest amend­ act of Congress, to defy the will of the people, and take ments. upon themselves, as an executive department, to adjust the Mr. ROBINSON of Arkansas. Mr. President, I am not foreign debts with our debtors, without respect to the popular sufficiently familiar with the bills referred to by number to will of the people, their wishes or their needs, are wholly attempt to pass judgment on the suggestion made by the without any foundation, should never have been sent abroad Senator from Indiana, and I suggest that he let the matter as an encouragement, and should never have been permitted go over until tomorrow. to be distributed throughout America by the expression of Mr. ROBINSON of Indiana. That is perfectly agreeable of our public men, or by any other source, as an inducement to me, Mr. President. I shall be glad to have the leader of to those lands abroad to assume that such favor would ever the majority examine the bills and study them, and have be advanced to them. his cooperation if I can get it. What I am interested in­ America stands on the Constitution as to her rights be­ and I know that is true with respect to the Senator from tween herself and foreign governments. She stands upon Arkansas as well-is that all sides may have an opportunity her treaties of peace between herself and foreign nations. to be heard. She stands upon the righteousness of her claim. She seeks The PRESIDING OFFICER. Without objection, the mo­ to oppress none, but she will be oppressed by none willingly tion to return the bills will be postponed. The motion to and will not accede to threats of others. reconsider will be entered. With the fulfillment of the obligation on the part of the Mr. ROBINSON of Indiana. I understand this is the last foreign debtors and the complete faith on the part of the day for entering such a motion, and therefore I should like United States in the fulfillment of the act of Congress, we to enter a motion to reconsider the vote by which each of shall again enter into that happy state described in sacred the two bills I have mentioned was passed. Scripture, where all our ways shall be ways of pleasantness Mr. ROBINSON of Arkansas. The Senator may supply and all our paths shall be paths o! peace. me privately with such information as he has concerning the I thank the Senate. proposal. VETERANS' REGULATIONS INCREASE IN VETERANS' ALLOWANCES AND CIVIL PAY SCALE The VICE PRESIDENT laid before the Senate a message from the President of the United States, which was read and Mr. VANDENBERG. Mr. President, I rise only to offer four exhibits from the contemporary press in respect to the ordered to lie on the table, as follows: problems which were canvassed by the Senate last week To the Congress of the United States: regarding veterans' allowances and the Government's civil Pursuant to the provisions of section 20, title I, of the act pay scale. There was some discussion earlier in the day on entitled "An act to maintain the credit of the United States the floor of the Senate about the effect of the action of the Government", approved March 20, 1933, I am transmitting House and Senate in removing the inequities-some of them herewith copies of Executive Orders No. 6661 (Veterans' indefensibly brutal-which existed both in respect to pay Regulation No. 1 (d)) and No. 6662 (Veterans' Regulation scales and in respect to veterans' allowances. Democratic No. 12 (a)), approved by me March 27, 1934. Senators testified to their belief that the President will not These veterans' regulations amend Veterans' Regulation undertake to penalize those great groups among his own No. 1 (a), approved by me on June 6, 1933, and Veterans' partisans who were unable to get the consent of their con­ Regulation No. 12, approved by me on March 31, 1933, and sciences to support his veto. have been issued in accordance with the terms of title I, I desire to supplement that discussion, Mr. President, to Public, No. 2, Seventy-third Congress, "An act to maintain the extent of offering a few encouraging and significant the credit of the United States Government." exhibits which shed new light on the whole proposition. FRANKLIN D. ROOSEVELT. There have been four very significant items in the contem­ THE WHITE HOUSE, March 27, 1934. porary press bearing upon this subject. 5860 CONGRESSIONAL RECORD-SENATE APRIL 2 The first exhibit to which I desire to call attention is a Mr. HARRISON. Mr. President, I do not expect to ask quotation from the Associated Press upon yesterday, which, to have taken up any matters that are controversial, but in discussing the Budget and deficit situation, says: there are many amendments which it seems to me we can The effect of increased veterans' payments and increased Gov­ dispose of this afternoon as to which there is no controversy. ernment employees' compensation, voted last week over President I hope we may take them up and dispose of some of them. Roosevelt's veto, is comparatively negligible so far as this fiscal year is concerned. The PRESIDING OFFICER. The clerk will state the first amendment. I repeat the phrase" comparatively negligible." The coun­ The first amendment of the Committee on Finance was, try has been led to believe otherwise. It would be highly under the heading " Subtitle B-General Provisions, Part !­ unfair to permit the impression to persist that the enormous Rates of Tax", on page 13, line 5, before the word "on", Budgetary deficit, attributable to prodigal spendings in other to strike out " tax " and insert " surtax ", and in the same directions, may be charged prejudicially against this act of line, after the word "section", to strike out "102" and simple congressional justice. insert " 351 '', so as to read: Secondly, it was urged upon us that special taxes would ( c) Tax on personal holding companies: For surtax on personal have to be provided in order to pay for this act of justice holding companies, see section 351. upon which the Congress insisted. I want to -invite atten­ tion to a publication on Saturday carried over the wires of Mr. FESS. Mr. President, does not the Senat.or think we the Universal Service quoting Mr. Speaker RAINEY, the ought to have a quorum? Democratic presiding officer of the House of Representatives, Mr. HARRISON. I do not, because it would take some who visited the White House with Democratic Majority time to secure a quorum, and I have been waiting pa­ Leader BYRNS, of the other body, with the result that this tiently for a good while in order that we might proceed I news account is significantly headed. This quotation would with the bill. I think we know generally what the contro­ \ appear to come from an authoritative source. The heading versial matters are. I am going to ask to pass those over. \ reads: I really think we can go along very well. The Senate knows we are considering the tax bill. RAINEY spikes report of tax-increase plan. Says additional reve­ nue not needed to meet pay bill. Mr. FESS. I want to cooperate with the Senator. So much for that tax scare-always calculated to inflame Mr. HARRISON. I understand that. Mr. FESS. I would not want the Senator to take up the people. I hope the quotation is correct. It should be­ anything that is controversial. in the light of the funds which we have placed at Executive disposal. Mr. HARRISON. No; I do not intend to do so. Thirdly, Mr. President, and still more significant, I notice The PRESIDING OFFICER. The question is on agreeing that Mr. Speaker RAINEY is quoted in black-face type as to the committee amendment. follows, as he left the White House upon Friday or Saturday: The amendment was agreed to. The President intended to do by Executive order exactly what The next amendment of the Committee on Finance was, the bill proposes-- on page 13, line 8, before the word " on '', to strike out Ref erring to the independent offices appropriation bill­ "tax" and insert "surtax"; and in line 9, after the word "section", to strike out "103 '' and insert "102 ", so as to by the end of the year; under the President's plan, almost all veterans cut off the rolls by the economy blll would have been read: restored. (d) Avoidance of surtaxes by incorp0ration: For surtax on cor­ porations which accumulate surplus to avoid surtax on stock­ That completes the quotation of this high spokesman for holders, see section 102. the majority party. From this statement, if true, it would appear that the legislative offense, if any, denounced in the The amendment was agreed to. Presidential veto, was not a violation of the Presidential pro­ The next amendment was, on page 13, line 14, after the gram but the anticipation of it by the Congress. It was that word "income", to insert "in excess of the credit against we spoke out of turn. The chief vice appears to be simply net income provided in section 26 ",so as to read: that Congress dared to reclaim some of its own constitu­ SEC. 13. Tax on corporations. (a) Rate of tax: There shall be levied, collected; and paid for each taxable year upon the net tional power which the administrative authors of the rules income of every corporation a tax of 13% percent of the amount and regulations under the economy act have enjoyed out­ of the net income in excess of the credit against net income pro­ rageously misusing. vided in section 26. (For addition to rate in case of consolidated Finally, Mr. President, bearing upon the controversy be­ returns, see sec. 141.) tween the able Senator from South Carolina [Mr. BYRNES] The amendment was agreed to. and the able Senator from Oregon [Mr. STEIWER] respecting The next amendment was, on page 13, line 20, before the the cost of the bill, I quote from the United States News of word " on ", to strike out " tax " and insert " surtax "; and April 2 an editorial signed by Mr. David Lawrence, as follows: in the same line, after the word " section ", to strike out The real difference in outlay between Mr. Roosevelt's proposal " 102 " and insert " 351 ", so as to read: in his veto message and the bill that finally passed was not $228,- 000,000. Of that sum about $103,000,000 was for the restoration ( c) Tax on persona.I holding companies: For surtax on personal of veterans' allowances and the remainder for Federal pay roll. It holding companies, see section 351. 1s estimated .that the President's last-minute suggestions for vet­ The amendment was agreed to. erans' pay increases would have meant about $60,000,000. The total margin between Congress and the President on both Federal The next amendment was, on page 13, line 23, before the pay increases and veterans' items was not, relatively speaking, very word "on", to strike out "tax" and insert "surtax"; and large-about $81,000,000. in line 24, after the word " section ", to strike out " 103 " I submit that this is in substantial accord with estimates and insert " 102 ", so as to read: argued by the Senator from Oregon [Mr. STEIWERl. (d) Improper accumulation of surplus: For surtax on corpora­ I wanted to submit these quotations for the benefit of the tions which accumulate surplus to avoid surtax on stockholders, see section 102. RECORD and for the information of the country. They suggest that the Congress has done what the President The amendment was agreed to. himself would have shortly done; that the results do not Mr. McNARY. Mr. President, on page 15 of the bill, the impair the Budget in a relative sense; and that Congress Senator from Roode Island [Mr. HEBERT] has an amend­ is well justified in its action. That, in any event, is my ment to offer. view. Unfair economy is a disservice to permanent economy Mr. HARRISON. It relates to annuities? because it invites prejudice against all economy. Mr. McNARY. Yes. INTERNAL-REVENUE TAXATION Mr. HARRISON. I ask that the provisions relating to The Senate resumed the consideration of the bill CH.R. annuities be passed over. '1835) to provide revenue, equalize taxation, and for other The PRESIDING OFFICER. Without objection, the purposes. amendments will be passed over. 1934 .CONGRESSIONAL RECORD-SENATE_ 5861 The next amendment of the Committee on Finance was, League should be deductible as if it were a charitable con­ on page 17, line 18, after the word " exempt ", to strike out tribution if it is a selfish one made to advance the personal " to the taxpayer ", so as to read: interests of the giver of the money. That is what the com­ (4) Tax-free interest: Interefit upon (A) the obligations of a mittee were trying to reach; but we found great difficulty in State, Territory, or any political subdivision thereof, or the Dis­ phrasing the amendment. I do not reproach the drafts­ trict of Columbia; or (B) obligations of a corporation organized men. I think we gave them an impossible task; but this under act of Congress, if such corporation is an instrumentality of the United States; or (C) the obligations of the United States amendment goes much further than the committee intended or its possessions. Every person owning any of the obligations to go. enumerated in clause (A}, (B), or (C) shall, in the return re­ Mr. COUZENS. Mr. President, will the Senator yield? quired· by this title, submit a statement showing the number and amount of such obligations owned by him and the income re­ The PRESIDING OFFICER. Does the Senator from ceived therefrom, in such form and with such information as the Pennsylvania yield to the Senator from Michigan? · Commissioner may require. In the case of obligations of the Mr. REED. I do. United States issued after September 1, 1917 (other than postal­ savings certificates of deposit), and in the case of obligations of Mr. COUZENS. Does not the Senator believe that the a corporation organized under act of Congress, the interest shall words" substantial part" will exclude the tuberculosis socie­ be exempt only if and to the extent provided in the respective ties and the children's welfare societies? Certainly a sub­ acts authorizing the issue thereof as amended and supplemented, and shall be excluded from gross income only if and to the extent stantial part of their income is not devoted to propagandiz­ it 1s wholly exempt from the taxes imposed by this title. ing for legislation. The amendment was agreed to. Mr. REED. I am not so sure. Take the case of those Mr. HARRISON. The next amendment, page 19, lines who are urging the adoption of the child-labor amendment: 23 and 24, relates to annuities, too. Certainly they are not acting from selfish motives, and yet al­ Mr. McNARY. I think we had better pass over the whole most their entire activity is an effort to influence legislation. subject. Mr. HARRISON. May I ask the Senator whether he does Mr. REED. Mr. President, what was done with the not think it would be wise to pass over this amendment for amendment at the top of page 16? the present? Mr. HARRISON. That was passed over at the request of Mr. REED. Perhaps that would be better. the Senator from Oregon. On page 20 is another amend­ Mr. HARRISON. Really, I think it ought to be inserted at ment with reference to annuities which I think ought to another place in the bill. be passed over. Mr. REED. I do not want to take too much time in dis­ The PRESIDING OFFICER. Without objection, the cussing it. amendments referred to will be passed over. The clerk will The PRESIDING OFFICER. Without objection, the state the next amendment. amendment will be passed over. The next amendment of the Committee o:ri Finance was, The reading of the bill was resumed. on page 25, line 7, after the word "individual", to insert a The next amendment of the Committee on Finance was, on comma and " and no substantial part of the activities of page 28, line 8, after the word "income", to insert "other which is participation in partisan politics or is carrying on propaganda, or otherwise attempting, to influence legis­ than interest", and in line 10, after the word "exempt", to strike out "to the taxpayer", so as to read: lation", so as to read: SEC. 24. Items not deductible: (a) General rule.-In computing (o) Charitable and other contributions: In the case o! an indi­ net income no deduction shall in any case be allowed in respect vidual, contributions or gifts made within the taxable year to or of- for the use of: ( 1) Personal, living, or family expenses; (1) The United States, any State, Territory, or any political sub­ (2) Any amount paid out for new buildings or for permanent division thereof, or the District of Columbia, for exclusively public improvements or betterments made to increase the value of any purposes; property or estate; (2) A corporation, or trust, or community chest, fund, or foun­ (3) Any amount expended in restoring property or in making dation, organized and operated exclusively for religious, charitable, good the exhaustion thereof for which an allowance is or has been scientific, literary, or educational purposes, or for the prevention made; of cruelty to children or animals, no· part of the net earnings of which inures to the benefit of any private shareholder or indi­ (4) Premiums paid on any life-insurance policy covering the vidual, and no substantial part of the activities of which is life of any officer or employee, or of any person financially inter­ participation in partisan politics or is carrying on propaganda, or ested in any trade or business carried on by the taxpayer, when the taxpayer is directly or indirectly a beneficiary under such otherwise attempting to influence legislation. policy; Mr. REED. Mr. President, as that amendment is worded, (5) Any amount otherwise allowable as a deduction which is it would apply to the Society for the Prevention of Cruelty allocable to one or more classes of income other than interest (whether or not any amount of income of that class or classes is to Children, to the Society for the Prevention of Cruelty to received or accrued) wholly exempt from the taxes imposed by this Animals, or any of the worthy institutions that we do not title~ or in the slightest mean to affect. The amendment was agreed to. Mr. HARRISON. Mr. President, will the Senator yield for a moment? The next amendment was, on page 28, line 17, after the Mr. REED. Certainly. words" per centum ", to strike out "of the voting" and in­ Mr. HARRISON. In considering that amendment, as I sert " in the value of the outstanding ". so as to read: recall, the sentiment of the committee was that the provi­ (6) Loss from sales or exchanges of property, directly or in­ directly, (A) between members of a family, or (B) except in the sion should apply to any organization that is receiving case of distributions in liquidation, between an individual and a contributions, the proceeds of which are to be used for corporation in which such individual owns, directly or indirectly, propaganda purposes or to try to influence legislation. more than 50 percent in value of the outstanding stock. For the purpose of this paragraph-(C) an individual shall be considered I called the attention of the experts to the fact that it as owning the stock owned, directly or indirectly, by his family; seemed to me the proviso at the end of the second paragraph and (D) the family of an individual shall include only his brothers should apply to all four paragraphs. Of course, that would and sisters (whether by the whole or half blood}, spouse, ancestors, affect some war organizations, but personally I see no differ­ and lineal descendants. ence between one organization that might be on one side of The amendment was agreed to. the fence getting contributions to propagandize and influ­ The next amendment was, on page 32, line 5, after the ence legislation and being permitted to proceed without inter­ word "than", to strike out "$8,000 ", and insert "$20,000 "• ference, while at the same time preventing one that might so as to read: have a different viewpoint from receiving or making use of (C) "Earned net income" means the excess of the amount of contributions for the same purpose. the earned income over the sum of the earned income deductions. Mr. REED. I have no objection whatever and no dis­ I! the taxpayer's net Income is not more than $3,000, his entire agreement with the Senator in regard to what we were try­ net income shall be considered to be earned net income, and if his net income is more th.an $3,000, his earned net income shall ing to do by this amendment. There is no reason in the not be considered to be less than $3,000. In no case shall the world why a contribution ma.de to the National Economy earned net income be considered to be more than $20,000. 5862 CONGRESSIONAL RECORD-SENATE APRIL 2 Mr. COUZENS. I think that amendment ought to go made and the date designated as the close of the :fl.seal year. If the change is from one fiscal year to another fiscal year, a sepa­ over. rate return shall be made for the period between the close of the Mr. HARRISON. I ask to have that amendment passed former fiscal year and the date designated as the close of the new over. It refers to the earned-income tax. fiscal year. The PRESIDING OFFICER. Without objection, the The amendment was agreed to. amendment will be passed over. The next amendment was, at the top of page 42, to insert The next amendment was, on page 33, after line 11, to the following: insert: (d) Trade or business: The term "trade or business" includes SEC. 26. Credits of corporation against net income: For the pur­ the performance of the functions of a public office. pose only of the tax imposed by section 13 there shall be '.3'11owed as a. credit against net income the amount received as mterest The amendment was agreed to. upon obligations of the United States or of corporations organized The next amendment was, on page 43, line 14, after the under act of Congress which is allowed to a.n individual as ~ word " the ". to strike out " treasurer or assistant treasurer " credit for purposes of normal tax by section 25 (a) (2) or (3). and insert "treasurer, assistant treasurer, or chief account­ Mr. COUZENS. Mr. President, will the Senator from ing officer.", so as to make the section read: Mississippi please explain to what that amendment refers? SEC. 62. Corporation returns: (a) Requirement: Every corpora­ There are references there to a number of sections which tion subject to taxation under this title shall make a return, I have not had time to analyze. stating specifically the items of its gross income and the deduc­ Mr. tions and credits allowed by this title. The return shall be HARRISON. This change, coupled with the change sworn to by the president, vice president, or other principal officer made in section 22 (b) (4), if the Senator will turn back to and by the treasurer, assistant treasurer, or chief accounting it, provides for uniform treatment of partially tax-exempt officer. In cases where receivers. trustees in bankruptcy, or as­ interest. Regardless of whether such interest is received by signees are operating the property or business of corporations, such receivers, trustees, or assignees shall make returns for such a corporation or by an individual, it will be included in gross corporations in the same manner and form as corporations are income, and taken out as a credit. This will greatly simplify required to make returns. Any tax due on the basis of such the laws, as the experts have pointed out. returns made by receivers, trustees, or assignees shall be collected in the same manner a.s if collected from the corporations of whose The PRESIDING OFFICER. The question is on agree­ business or property they have custody and control. ing to the amendment. (b) Consolidated returns: For provision as to consolidated re­ The amendment was agreed to. turns of affiliated corporations, see section 141. The next amendment was, on page 35, line 18, after the The amendment was agreed to. word "deductions", to strike out "in computing net in­ The next amendment was, under the subhead " Subtitle

come" and insert "and credits", so as to make the section C---Supplemental Provisions " 1 on page 50, line 24, after the read: word "individual", to insert a comma and "and no sub­ SEC. 43. Period for which deductions and credits taken: The stantial part of the activities of which is participation in deductions and credits provided for in this title shall be taken partisan politics or is carrying on propaganda, or otherwise for the taxable year in which "pai<;l or a~crued" or "paid or in­ attempting, to influence legislation;", so as to read: curred '', dependent upon the method of accountin~ upon the basis of which the net income is computed, unless m order to SEC. 101. Exemptions from tax on corporations: The following clearly reflect the income the deductions or credits should be organizations shall be exempt from taxation under this title-- taken as of a different period. In the case of the death of a tax­ (I) Labor, agricultural, or horticultural organizations; payer there shall be allowed as deductions and credits for the (2) Mutual savings banks not having a capital stock represented taxable period in which falls the date of his death, amounts by shares; accrued up to the date of his death if not otherwise properly (3) Fraternal beneficiary societies, orders, or associations, (A) allowable in respect of such period or a prior period. operating under the lodge system or for the exclusive benefit of the members of a fraterni.ty itself operating under the lodge sys­ The amendment was agreed to. tem; and (B) providing for the payment of life, sick, accident, or The next amendment was, on page 37, line 19, after the other benefits to the members of such society, order, or association word "disposition" and the period, to insert "Any gain or or their dependents; (4) Domestic building and loan associations substantially all loss so resulting shall be considered as resulting from the the business of which is confined to making loans to members; sale or exchange of the property in respect of which the and cooperative banks without capital stock organized and oper­ installment obligation was received.", so as to read: ated for mutual purposes and without profit; ( 5) Cemetery companies owned and operated exclusively for the (d) Gain or loss upon disposition of installment obli~ations: benefit of their members or which are not operated for profit; If an installment obligation is satisfied at other than its face and any corporation chartered solely for burial purposes as a value or distributed, transmitted, sold, or otherwise disposed of, cemetery corporation and not permitted by its charter to engage gain or loss shall result to the extent of the difference between in any business not necessarily incident to that purpose, no part the basis of the obligation and ( 1) in the case of satisfaction at of the net earnings of which inures to the benefit of any private other than face value or a sale or exchange--the amount realized, shareholder or individual; or (2) in case of a distribution, transmission, or disposition other­ (6) Corporations, and any community chest, fund, or founda­ wise than by sale or exchange--tbe fair market value of the obli­ tion, organized and operated exclusively for religious, charitable, gation at the time of such distribution, transmission, or disposi­ scientific, literary, or educational purposes, or for the prevention of tion. Any gain or loss so resulting shall be considered as result­ cruelty to children or animals, no part of the net earnings of ing from the sale or exchange of the property in respect of which which inures to the benefit of any private shareholder or indi­ the installment obligation was received. The basis of the obli­ vidual, and no substantial part of the activities of which is par­ gation shall be the excess of the face value of the obligation ticipation in partisan politics or is carrying on propaganda, or over an amount equal to the income which would be returnable otherwise attempting to in.fiuence legislation; were the obligation satisfied in full. This subsection shall not apply to the transmission at death of installment obligations Mr. REED. That involves the same question we were if there is filed with the Commissioner, at such time as he may discussing a few minutes ago. by regulation prescribe, a bond in such amount and with such sureties as he may deem necessary, conditioned upon the return Mr. HARRISON. I ask to have that amendment passed as income, by the person receiving any payment on such obliga­ over. tions of the same proportion of such payment as would be re­ The PRESIDING OFFICER. Without objection, the turn~ble as income by the decedent if he had lived and had received such payment. amendment will be passed over. The next amendment was, on page 55, after line 15, to The amendment was agreed to. strike out the following: The next amendment was, on page 39, line 11, after the SEC. 102. Tax on personal holding companies: (a) Tax on per­ word " from ", to strike out " the ", so as to read: sonal holding company. In addition to the tax imposed by section SEc. 47. Returns for a period of less than 12 months: (a) Re­ 13, there shall be levied, collected, and paid, for ea~h taxable year, turns for short period resulting from change of accounting upon the undistributed adjusted net income of every personal period: If a taxpayer, with the approval of the Commissioner, holding company a tax of 35 percent thereof. Such tax shall be changes the basis of computing net income from fiscal year to computed, collected, and pa.id in the same manner and subject to calendar year, a separate return shall be made for the period be­ the same provisions of law (including penalties) as the tax tween the close of the last :fl.seal year for which return was made imposed by section 13. and the following December 31. If the change is from calendar (b) Definitions: As used in this section, (1) the term" personal. year to fiscal year, a separate return shall be made for the period holding company " means any corporation (other than a. banking between the close of the last calendar year for which return was or insurance corporation) 1f (A) at least 80 percent o! its gross 1934 CONGRESSIONAL RECORD-SENATE 5863 income for the taxable year ts derived from rents, royalties, divi­ Mr. HARRISON. I think the personal holding tax is o! dends, interest, annuities, and (except in the case of regular deal­ ers in stock or securities) gains from the sale of stock or securities, considerable importance and ought to be passed over. and ( B) at a.ny time during the last half of the taxable year more The PRESIDING OFFICER. Without objection, the than ~ percent in value of its outstanding stock is owned, directly amendment will be passed over. or indirectly, by or for not more than five individuals. For the purpose of determining the ownership of stock in a personal hold­ The next amendment was, on page 60, after line 16 to ing company-(C) stock owned, directly or indirectly, by a cor­ strike out the following section: ' poration, partnership, estate, or trust shall be considered as being owned praportionately by its shareholders, partners, or benefici­ SEC. 104. Tax on citizens and corporations of certain foreign countries: Whenever the President finds that, under the laws o! aries; (D) an individual shall be considered as owning, to the any foreign country, citizens or corporations of the United States exclusion of any other individual, the stock owned, directly or indirectly, by his family, and this rule shall be applied in such are being subjected to discriminatory taxes, the President shall so manner as to produce the smallest possible number of individuals proclaim an~ each citizen or corporation of such foreign country owning,_ directly or indirectly, more than 50 percent in value of shall be subJect, for the taxable year during which such procla­ the o-utstanding stock; and (E) the family of an individual shall n:iation. is made, and for each taxable year thereafter. to an addi­ 50 of Include only his brothers and siste:rs (whether by the whole or half tional mcome tax equal to percent the income tax otherwise blood), spouse, ancestors, and lineal descendants. For the pur­ imposed upon such citizen or corporation by this title. Such pose of clause (A} of this paragraph the term "gross income" additional income tax shall be computed, collected, and paid in includes the amount of interest upon obligations of the United the same ma~er and subject to the same provisions of law (in­ 11, 12, 13 States issued after September l, 191 'l, which would be subject to cluding penalties) as the taxes imposed by sections and tax in whole or in part in the hands of an individual owner. upon such citizen or corporation. Whenever the President finds (2) The term "undistributed adjusted net income" means the that. the laws of any foreign country with respect to which the adjusted net income minus the sum of: President has made a proclamation under the preceding provi­ (A) Ten percent of the adjusted net income; and sions of this seetion have been modified so that discriminatory (B) Dividends paid during the taxable year. · taxes applicable to citizens and corporations of the United States { 3) The term " adjusted net income " means the sum of: hav~ been r~moved, he shall so proclaim, and the provisions of this (A) The net income determined without regard to the provisions sec:t1on levymg an additional Income tax shall not apply to any o! this section; citizen or corporation o! such foreign country with respect to any (B) The amouni o! the dividend deduction allowed under taxable year after such proclamation is made. section 23 ( p) ; and And to insert in lieu thereof the fallowing: (C) The amount of interest upon obligations of the United States issued after September 1, 1917, which would be subject to SEC. 103. Rates o! tax on citizens and corporations o:f certain tax in whole or in part. in the hands of an individual. owner; minus foreign countries: Whenever the President finds that, under the the sum of: laws of any foreign country, citizens. or corporations of the United (D) Federal income, war-profits. a.nd excess-profits truces paid or States are being subjected to discriminatory or extraterritorial accrued, but not including the tax imposed by this section; taxes, the President shall so proclaim and the rates of tax im­ (E) Contributions or gifts, not otherwise allowed as a deduc­ posed by sections 11, 12, 13, 201 (b), and 204 (a) shall, for the tion, to or for the use of donees described in section 23 ( o) for taxable year during which such proclamation is made and for eac.h the purposes therein specified; and taxable year thereafter, be doubled in the case of each citizen and (F) Losses from sales or exchanges of capital as.5ets which are corporation of such foreign country; but the tax at such doubled disallowed as a deduction by section 117 (d). rate shall be considered as imposed by sections 11, 12, 13, 201 (b), SEc. 103. Tax on other corpol'ations improperly accumulating or 204 (a) , as the case may be. In no case shall this sectton surplus: (a) In addition to the tax imposed by section 13, there OJ?erate to increase the taxes imposed by such sections (computed shall be levied, collected, and paid for each taxable year upon the without regard to this section) to an amount in excess of 80 net income of every corporation (other than a personal holding percent of the net income of the taxpayer. Whenever the Presi­ company as defined ill sec. 102) a. tax equal to 25 percent of the dent finds that the laws of any foreign country with respect to amount thereof, !-f such corporation, however created or organized, which. the Presi~ent has made a. proclamation under the preceding is formed or availed of for the purpose of preventing the imposi­ provisions of this section have been modified so that discrimina­ tion of the surtax upon its shareholders or the shareholders of tory and extraterritorial taxes applicable to citizens and corpora­ any other corporation, through the medium of permitting gains tio~ of the United States ha.ve been removed, he shall so pro­ and profits to accumulate instead of being divided or distributed. claim, and the provisions of this section providing for doubled Such tax shall be computed, collected, and paid in the same rates of tax shall not apply to any citizen or corporation of such manner and subject to the same provisions o! law (including foreign country with respect to any taxable year beginning after penalties) as the tax imposed by section 13. such proclamation is made. (b) The fact that any corporation is a mere holding or invest­ The amendment was agreed to. ment company, or that the gains or profits are permitted to ac­ cumulate beyond the reasonable needs of the business shall be The next amendment was, on page 66, line 3, after the prima facfe evidence of a purpose to avoid surtax. ' word "corporation", to insert" accumulated. after February ( c) As used in this section, the term " net income " means the 28, 1913 ", so as to read: net income as defined in section 21, increased by the sum of: ( 1) the amount of the dividend deduction allowed under sec­ (c) Gain from exchanges not solely in kind: (1) If an exchange tion 23 (p), and would be within the provisions of subsection (b) (1), (2), (3), or (2) the amount o! the interest on obligations o! the United (5) of this section if it were not for the fact that the property States issued after September 1, 1917, which would be subject to received in exchange consists not only of property permitted by tax in. W:h<;>le or in part in the hands of an individual owner; such paragraph to be received without the recognition of gain, but but dlDllmshed by the amount of dividends paid during the alsc;> .of other property or money, then the gain, if any, to the taxable year. recipient shall be recognized, but in an amount not in excess of the sum of such money and the fair market value of such other And to insert: property. SEC. 102. Surtax on corporations improperly accumulating sur­ (2) If a distribution ma~e in pursuance of a plan of reorganiza­ 1) pl~s: (a) Imposition o! tax: There shall be levied, collected, and tion is within the provisions of paragraph ( of this subsection paid for. each taxable year upon the adjusted net income of every but has the effect of the distribution of a taxable dividend, then corporation (other than a personal holding company as defined there shall be taxed as a dividend to each distributee such an in sec. 351) if such corporation, however created or organized. amount of ~he gain recognized under paragraph ( 1) as is not in is formed or availed of for the purpose of preventing the imposi­ excess of his ratable share of the undistributed earnings and tion of the surtax upon its shareholders or the shareholders of profits of the corporation accumulated after February 28, 1913. any other corporation, through the medium of permitting gains The remainder, if any, of the gain recognized under paragraph (1) and profits to accumulate instead of being divided or distributed shall be taxed as a gain from the exchange of property. a surtax equal to the sum of the following: ' The amendment was agreed to. (1) 25 percent of the amount of the adjusted net income not in excess of $100,000, plus The next amendment was, on page 68, line 4, after the (2) 35 percent of the amount of the adjusted net income in article "a", to strike out "merger or consolidation or (B) ,, excess of $100,000. and insert "statutory merger or consolidation, or' (B) the (t>) Prima facie evidence: The fact that any corporation is a mere holding or investment company, or that the gains or profits acquisition by one corporation in exchange solely for its vot­ are permitted to accumulate beyond the reasonable needs of the ing stock; of at least 80 percent of the voting stock and at business, shall be prima facie evidence o! a purpose to a. void least 80 percent of the total number of shares of all other surtax. ( c) Definition o! .. adjusted net income .. : As used 1n this sec­ classes of stock of another corporation; or of substantially tion, the term " adjusted net income " means the net Income in­ all the properties of another corporation, or (C) ", in line 15, creased by the amount of the dividend deduction allowed under before the article" a", to strike out "(C)" and insert "(D) ", section 23 (p), but d1m1nished by the amount of dtvidends pa.id "CD)'' during the taxable year. and at the end of the same line to strike out and ( d) Tax on personal holding companies: For smtax on personal insert "CE) "; and in line 20, after the word " reorganiza­ holding companies, see section 351. tion ", to insert " and includes both corporations in the case 5864 CONGRESSIONAL RECORD-SENATE APRIL 2 of a reorganization resulting from the acquisition by one depletion, and the depletion allowance in respect of such property corporation of stock or properties of another", so as to read: for such year shall be computed according to the election thus made. If the taxpayer fails to make such statement in the return, (g) Definition of reorganization: As used in this section and the depletion allowance for such property for such year shall section 113-- be computed without reference to percentage depletion. The ( 1) The term" reorganization" means (A) a statutory merger or method, determined as above, of computing the depletion allow­ consolidation, or (B) the acquisition by one corporation in ex­ ance shall be applied in the case of the property for all taxable change solely for its voting stock; of at least 80 percent of the years in which it is in the hands of such taxpayer, or of any other voting stock and at least 80 percent of the total number of shares person 1f the basis of the property (for determining gain) in his of all other classes of stock of another corporation; or of substan­ hands is, under section 113, determined by reference to the basis tially all the properties of another corporation, or (C) a transfer in the hands of such taxpayer, either directly or through one or by a corporation of all or a part of its assets to another corpora­ more substituted bases, as defined in that section. tion 1f immediately after the transfer the transferor or its stock­ holders or both are in control of the corporation to which the So as to read: assets are transfeITed, or (D) a recapitalization, or (E) a mere ( 4) Percentage depletion for coal and metal mines and sulphur: change in identity, form, or place of organization, however effected. The allowance for depletion under section 23 (m) shall be, in th~ ( 2) The term " a party to a reorganization " includes a corpora­ case of coal mines, 5 percent, in the case of metal mines, 15 tion resulting from a reorganization and includes both corpora­ percent, and, in the case of sulphur mines or deposits, 23 percent, tions in the case of a reorganization resulting from the acquisition of the gross income from the property during the taxable year, by one corporation of stock or properties of another. excluding from such gross income an amount equal to any rents or royalties paid or incurred by the taxpayer in respect of the Mr. HARRISON. We had better pass over that amend­ property. Such allowance shall not exceed 50 percent of the net ment. It is a very important one. income of the taxpayer (computed without allowance for deple­ The PRESIDING OFFICER. Without objection, the tion) from the property. A taxpayer making his first return under this title in respect of a property shall state whether he elects to amendment will be passed over. have the depletion allowance for such property for the taxable The next amendment was, on page 71, line 8, after the year for which the return is made computed with or without word " inheritance ", to insert a comma and " or by the regard to percentage depletion, and the depletion allowance in decedent's estate from the decedent", so as read: respect of such property for such year shall be computed according to to the election thus made. If the taxpayer fails to make such ( 5) Property transmitted at death: If the property was acqUired statement in the return, the depletion allowance for such property by bequest, devise, or inheritance, or by the decedent's estate from for such year shall be computed without reference to percentage the decedent, the basis shall be the fair market value of such depletion. The method, determined as above, of computing the property at the time of such acquisition. In the case of property depletion allowance shall be applied in the case of the property transferred in trust to pay the income for life to or upon the for all taxable years in which it is in the hands of such taxpayer, order or direction of the grantor, with the right reserved to the or of any other person if the basis of the property (for determin­ grantor at all times prior to his death to revoke the trust, the ing gain) in his hands is, under section 113, determined by basis of such property in the hands of the persons entitled under reference to the basis in the hands of such taxpayer, either the terms of the trust instrument to the property after the grant­ directly or through one or more substituted bases, as defined in or's death shall, after such death, be the same as if the trust that section. instrument had been a will executed on the day of the grantor's death. For the purpose of this paragraph property passing with­ Mr. COUZENS. I think that amendment ought to go out full and adequate consideration under a general power of over. The Senator from Tennessee is going to offer an appointment exercised by will shall be deemed to be property amendment to that section. passing from the individual exercising such power by bequest or devise. Mr. HARRISON. I ask that it be passed over. The PRESIDING OFFICER. The amendment will be The amendment was agreed to. passed over. The next amendment was, on page 76, line 17, after "(12) ", The next amendment was, on page 84, line 22, after the to insert" Basis established by Revenue Act of 1932: ",so as word "profits", to insert "accumulated after February 28, to read: 1913 ", so as to read: (12) Basis established by Revenue Act of 1932: If the prop­ SEC. 115. Distributions by corporations: (a) Definition of divi­ erty was acqUired, after February 28, 1913, in any taxable year dend: The term " dividend " when used in this title (except in beginning prior to January 1, 1934, and the basis thereof, for the sec. 203 (a) (4) and sec. 207 (c) (1), relating to insurance purposes of the Revenue Act of 1932 was prescribed by section companies) means any distribution made by a corporation to its 113 (a) (6), (7). or (9) of such act, then for the purposes of this shareholders, whether in money or in other property, out of its act the basis shall be the same as the basis therein prescribed in earnings or profits accumulated after February 28, 1913. the Revenue Act of 1932. The amendment was agreed to. The amendment was agreed to. The next amendment was, on page 77, line 1, after "(13) ", The next amendment was, on page 85, line 1, after the word "profits" and the period, to insert "Any earnings or to insert " Partnerships: ", so as to read: profits accumulated, or increase in value of property accrued, (13) Partnerships: If the property was acquired, after February before March l, 1913, may be distributed exempt from tax, 28, 1913, by a partnership and the basis is not otherwise deter­ mined under any of the paragraphs (1) to (12), inclusive, of after the earnings and profits accumulated after February this subsection, then the basis shall be the same as it would be 28, 1913, have been distributed, but any such tax-free dis­ in the hands of the transferor, increased in the amount of gain tribution shall be applied against and reduce the adjusted or decreased in the amount of loss recognized to the transferor upon such transfer under the law applicable to the year in which basis of the stock provided in section 113 ", so as to read: the transfer was made. If the property was distributed in kind by (b) Source of distributions: For the purposes of this act every a partnership to any partner, the basis of such property in the distribution is ma.de out of earnings or profits to the extent thereof, hands of the partner shall be such part of the basis in his hands and from the most recently accumulated earnings or profits. Any of his partnership interest as is properly allocable to such earnings or profits accumulated, or increase in value of property property. accrued, before March l, 1913, may be distributed exempt from tax, after the earnings and profits accumulated after February 28, The amendment was agreed to. 1913, have been distributed, but any such tax-free distribution The next amendment was, on page 83, line 11, after the shall be applied against and reduce the adjusted basis of the word " property " and the period, to strike out: stock provided in section 113. A taxpayer making his first return under this title in respect of The amendment was agreed to. a property shall state whether he elects to have the depletion The next amendment was, on page 86, line 5, after the word allowance for such property for the taxable year for which the "shareholders", to insert "is not out of increase in value return is made computed with or without regard to percentage depletion, and the depletion allowance in respect of such property of property accrued before March 1, 1913, and", so as to for such year and all succeedi.ng taxable years shall be computed read: according to the election thus made. If the taxpayer fails to make (d) Other distributions from capital: If any distribution (not such statement in the return, the depletion allowance for such in partial or complete liquidation) made by a corporation to its property for all taxable years shall be computed without reference shareholders is not out of increase in value of property accrued to percentage depletion. before March l, 1913, and is not out of earnings or profits, then And in lieu thereof to insert: the amount of such distribution shall be applied against and reduce the adjusted basis of the stock provided in section 113, and A taxpayer making his first return under this title in respect of if in excess of such basis, such excess shall be taxable in the same a property shall state whether he elects to have the depletion manner as a gain from the sale or exchange of property. a!lowance for such property for the taxable year for which the return is made computed with or without regard to percentage The amendment was agreed to. 1934 CONGRESSIONAL RECORD~ENATE 5865

The next amendment was, on page 87, line 4, after the (b) Limit on credit.-The amount of the credit t~en under this section shall be subject to each of the following lunitations: word "profits" to insert "accumulated after February 28, ( l) The amount of the credit in respect of the tax paid or 1913 ", so as to read: accrued to any country shall not exceed the same proportion of (g) Redemption of stock: If a corporation cancels or redeems the tax against which such credit is taken, which the t8:xpaye!'s its stock (whether or not such stock was issued as a sto~k ~ivi­ net income from sources within such country bears to his entire dend) at such time and in such manner as to ~ake the d1str~bu­ net income for the same taxable year; and tion and cancelation or redemption in whole or m part essentially (2) The total amount of the credit shall not exceed the same equivalent to the distribution of a taxable dividend, the amount proportion of the tax against which such credit is taken, which so distributed in redemption or cancelation of the stock, to the the taxpayer's net income from sources without the United States extent that it represents a distribution of earnings or profits ac­ bears to his entire net income for the same taxable year. cumulated after February 28, 1913, shall be treated as a taxable dividend. The amendment was agreed to. The next amendment was, on page 112, line 11, after the The amendment was agreed to. words " per centum ", to insert a comma and " but the tax at The next amendment was, on page 93, line 16, after the such increased rate shall be considered as imposed by section figure "5 ", to strike out "years." and insert "years but not 13 (a), 201 (b), or 204 , as the case may be", so as to for more than 10 years"; and on the same page, after line read: 17, to insert "30 percent if the capital asset has been held SEC. 141. Consolidated returns of corporations: (a) Privilege to for more than 10 years.", so as to read: file consolidated returns.-An affiliated group of corporations shall, SEc. 117. Capital gains and losses: (a) General rule: In ~he subject to the provisions of this section, have the privilege of mak­ case of a taxpayer, other than a corporation, only the followmg ing a consolidated return for the taxable year in lieu of separate percentages of the gain or loss recognized upon the sale or ~x­ returns. The making of a consolidated return shall be upon the change of a capital asset shall be taken into account in computmg condition that all the corporations which have been members of net income: the affiliated group at any time during the taxable year for which 100 percent if the capital asset has been held for not more than the return is made consent to all the regulations under subsection 1 year; (b) (or, in case such regulations are not prescribed prior to the 80 percent if the capital asset has been held for more than making of the return, t-hen the regulations prescribed under sec­ 1 year but not for more than 2 years; tion 141 (b) of the Revenue Act of 1932 insofar as not inconsistent 60 percent if the capital asset has been held for more than with this act) prescribed prior to the making of such return; and 2 years but not for more than 5 years; the making of a consolidated return ,shall be considered as such 40 percent if the capital asset bas been held for more than consent. In the case of a corporation which is a member of the 5 years but not for more than 10 years; affiliated group for a fractional part of the year, the consolidated 30 percent if the capital asset has been held for more than return shall include the income of such corporation for such part 10 years. of the year as it is a member of the affiliated group. (b) Regulations.-The Commissioner, with the approval of the Mr. LA FOLLETTE. I think that amendment ought to be Secretary, shall prescribe such regulations as he may deem neces­ passed over. sary in order that the tax liability of an affiliated group of corpo­ rations making a consolidated return and of each corporation in Mr. HARRISON. I ask to have it passed over. the group, both during and after the period of affiliation, _may be The PRESIDING OFFICER. The amendment will be determined, computed, assessed, collected, and adjusted I~ such passed over. manner as clearly to reflect the income and to prevent avoidance The next amendment was, on page 94, line 3, after the of tax liability. (c) Computation and payment of tax: In any case. in which word " sale ", to strike out " in the " and insert " to cus­ a consolidated return is made the tax shall be determmed, com­ tomers in the ordinary", so as to read: puted, assessed, collected, and adjusted in accordance ~ith the regulations under subsection (b) (or, in case such regulations are ( b) Definition of capital assets : For the purposes of this title, not prescribed prior to the making of the return, then the regu­ "capital assets " means property held by the taxpayer (whether or lations prescribed under section 141 (b) of the Rev_enue Act of not connected with his trade or business), but does not include 1932, insofar as not inconsistent with this act) prescribed prior to stock in trade of the taxpayer or other property of a kind which the date on which such return is made; except that there shall be would properly be included in the inventory of the taxpayer 1f added to the rate of tax prescribed by sections 13 (a), 201 (b), on hand at the close of the taxable year, or property held by the and 204 (a), a rate of 2 percent, but the tax at such increased rate taxpayer primarily for sale to customers in the ordinary course shall be considered as imposed by section 13 (a), 201 (b). or of his trade or business. 204 (a), as the case may be. Mr. HARRISON. May I ask the Senator from Pennsyl­ The amendment was agreed to. vania whether this amendment is important enough to pass The next amendment was, on page 115, line 21, after the over? word " one ", to strike out " or " and insert " of ", so as to Mr. REED. It involves a good many questions. read: Mr. HARRISON. Then let it be passed over, too. (b) Joint fiduciaries: Under such regulations as the Com.mis· The PRESIDING OFFICER. The amendment referred stoner, with the approval of the Secretary, may prescribe a return to, and the ones on pages 95, 96, and 100, without objection, made by one of two or more joint fiduciaries and ~ed in .the office of the collector of the district where such fiduciary resides will be passed over. shall be sufficient compliance with the above requirement. Such The next amendment was under the subhead " Supple­ fiduciary shall make oath ( 1) that he has sufficient knowledge of ment C--Credits against tax", on page 107, line 1, before the affairs of the individual, estate, or trust for which the return is made, to enable him to make the return, and (2) that the return the word " the ", to strike out " one half of ", and on the is to the best of his knowledge and belief, true and correct. same page, line 6, before the word" the", to strike out" one '(c) Law applicable to fiduciaries: Any fiduciary required.to make half of'', so as to read: a return under this title shall be subject to all the provISions of law which apply to individuals. SEC. 131. Taxes of foreign countries and possessions of United States: (a) Allowance of credit.-If the taxpayer signifies in his The amendment was agreed to. return bis desire to have the benefits of this section, the tax The next amendment was, on page 116, line 13, after the imposed by this title shall be credited with: (1) Citizen and domestic corporation: In the case of a citizen word" before'', to strike out" January" and insert "July", of the United States and of a domestic corporation, the amount of so as to read: any income, war-profits, and excess-profits taxes paid or accrued Sec. 143. Withholding of tax at source: (a) Tax-free covenant during the taxable year to any foreign country or to any possession bonds.-( 1) Requirement of withholding: In any case where of the United States; and bonds, mortgages, or deeds of trust, or other similar obligations (2) Resident of United States: In the case of a resident of the of a corporation, issued before July l, 1934, contain a contract or United States, the amount of any such taxes paid or accrued dur­ provision by which the obligor agrees to pay any portion of the ing the taxable year to any possession of the United States; and tax imposed by this title upon the obligee, or to reimbur~e the (3) Alien resident of United States: In the case of an alien resi­ oblicree for any portion of the tax, or to pay the interest without dent of the United States, the amount of any such taxes paid or ded.:iction for any tax which the obligor may be required or per­ accrued during the taxable year to any foreign country, if the for­ mitted to pay thereon, or to retain therefrom under any law of eign country of which such alien resident is a citizen or subject, in tb.e United States, the obligor shall deduct and withhold a tax imposing such taxes, allows a similar credit to citizens of the equal to 2 percent of the interest upon such bonds, mortgages, United States residing in such country; and deeds of trust, or other obligations, whether such interest is pay· (4) Partnerships and estates: In the case of any such individual able annually or at shorter or longer periods, if payable to an who is a member of a partnership or a beneficiary of an estate individual, a partnership, or a. foreign corporation not engaged in or trust, his proportionate share of such taxes of the partnership trade or business within the United States and not having any or the estate or trust paid or accrued during the taxable year to a o:ffice or place of business therein: foreign country or to any possession of the United States, as the case may be. ne amendment was agreed to. 5866 CONGRESSIONAL RECORD-SENATE APRIL 2 The next amendment was, under the subhead " Supple­ United States in excess of the credit provided in subsection (f) 137, 15, of this section. ment G-Insurance companies" on page line after (For addition to rate in case of consolidated returns, see sec. the word "of", to strike out "its net income" and insert 141.) " the amount of its net income in excess of the credit pro­ vided in su'.-Jsection (c) of this section", so as to read: The amendment was agreed to. The next amendment was, on page 146, line 10, after the SUPPLEMENT G--INSURANCE COMPANIES word " if ", to strike out " is exempt to a corporation from SEC. 201. Tax on life insurance companies: (a) Definition.­ When used in this title the term" life insurance company" means the taxes imposed by this title" and insert "excluded from an insurance company engaged in the business of issuing life in­ gross income; ", so as to read: surance and annuity contracts (including contracts of combined (c) Deductions allowed: In computing the net income of an life, health, and accident insurance), the reserve funds of which insurance company subject to the tax imposed by this section held for the fulfillment of such contracts comprise more than 50 there shall be allowed as deductions: percent of its total reserve funds. ( 1) All ordinary and necessary expenses incurred, as provided (b) Rate of tax.-In lieu of the tax imposed by section 13, there in section 23 (a) ; shall be levied, collected, and paid for each taxable year upon the ( 2) All interest as provided in section 23 (b) ; net income of every life-insurance company a tax as follows: (3) Taxes as provided in section 23 (c); (1) In the case of a domestic life-insurance company, 13% per­ (4) Losses incurred as defined in subsection (b) (6) of this cent of the amount of its net income in excess of the credit pro­ section; vided in subsection ( c) of this section. (5) Subject to the limitation contained in section 117 (d), losses sustained during the taxable year from the sale or other The amendment was agreed to. disposition of property; The next amendment was, on page 137, line 19, after the (6) Bad debts in the nature of agency balances and bills re­ word " of ", to strike out " its net income from sources ceivable ascertained to be worthless and charged otr within the taxable year; within the United States " and insert " the amount of its (7) The amount received as dividends from corporations as pro­ net income from sources within the United States in excess vided in section 23 (p} ; of the credit provided in subsection (c) of this section", so (8) The amount of interest earned during the taxable year as to read: which under section 22 (b) (4) is excluded from gross income; (2) In the case of a foreign life-insurance company, 13% per­ The amendment was agreed to. cent of the amount of its "net income from sources within the The next amendment was, on page 146, after line 22, to United States in excess of the credit provided in subsection (c) of insert: this section. (For addition to rate in case of consolidated returns, see sec. (f) For the purpose only of the tax imposed by this section 141.) there shall be allowed as a credit against net income the amount received as interest upon obligations of the United States or of The amendment was agreed to. corporations organized under act of Congress which is allowed The next amendment was, at the top of page 138, to insert: to an individual as a credit for purposes of normal tax by section 25 (a) (2) or (3). ( c) For the purpose only of the tax imposed by this section there shall be allowed as a credit against net income the amount The amendment was agreed to. received as interest upon obligations of the United States or of corporations organized under act of Congress which is allowed to The next amendment was, on page 159, line 10, after the an indlvidual as a credit for purposes of normal tax by section 25 figures "1922,", to insert "in addition to the credit provided (a) (2) or (3). in section 26,", so as to read: The amendment was agreed to. SUPPLEMENT K-<:HINA TRADE ACT CORPORATIONS The next amendment was, on page 139, line l, after the SEC. 261. Credit against net income: (a) Allowance of credit.­ word "is", to strike out "exempt to a corporation from For the purpose only of the tax imposed by section 13 there shall be allowed, in the case of a corporation organized under the the taxes imposed by this title!' and insert " excluded from China Trade Act, 1922, in addition to the credit provided in sec­ gross income ", so as to read: tion 26, a credit against the net income of an amount equal to SEC. 203. Net income of life-insurance companies: (a) General the proportion of the net income derived from sources within rule.-In the case of a life-insurance company the term "net China (determined in a similar manner to that provided in sec­ income " means the gross income less-- tion 119} which the par value of the shares of stock of the cor­ ( 1) Tax-free interest.-The amount of interest received during poration owned on the last day of the taxable year by ( 1) persons the taxable year which under section 22 (b) (4) is excluded from resident in China, the United States, or possessions of the United gross income. States, and (2) individual citizens of the United States or China wherever resident, bears to the par value of the whole number The amendment was agreed to. of shares of stock of the corporation outstanding on such date: Provided, That in no case shall the amount by which the tax im­ The next amendment was, on page 141, line 9, after the posed by section 13 is diminished by reason of such credit exceed word "carry", to strike out the comma and "or the pro­ the amount of the special dividend certified under subsection ceeds of which were used to purchase or carry", so as to ( b} of this section. read: The amendment was agreed to. (8) Interest.-All interest paid within the taxable year on its The next amendment was, on page 162, line 19, after the indebtedness, except on indebtedness incurred or continued to word " Sunday '', to insert " or a legal holiday in the District purchase or carry obligations (other than obligations of the United States issued after September 24, 1917, and originally .subscribed of Columbia ", so as to read: for by the taxpayer) the interest upon which is wholly exempt SEC. 272. Procedure in general: (a) Petition to Board of Tax from taxation under this title. Appeals: If in the case of any taxpayer the Commissioner deter­ mines that there is a deficiency in respect of the tax imposed by The amendment was agreed to. this title, the Commissioner is authorized to send notice of such The next amendment was, on page 142, line 16, after the deficiency to the taxpayer by registered mail. Within 90 days word "of", to strike out "if net income" and insert "the after such notice is mailed (not counting Sunday or a legal holi­ day in the District of Columbia as the ninetieth day), the tax­ amount of its net income in excess of the credit provided payer may file a petition with the Board of Tax Appeals for a in subsection (f) of this section", and on page 142, line 20, redetermination of the deficiency. No assessment of a deficiency after the word "of", to strike out "its net income from in respect of the tax imposed by this title and no distraint or proceeding in court for its collection shall be made, begun, or sources within the United States " and insert " the amount prosecuted until such notice has been mailed to the taxpayer, nor of its net income from sources within the United States in until the expiration of such 90-day period, nor, if a petition has excess of the credit provided in subsection (f) of this sec­ been fl.led with the Board, until the decision of the Board has tion ", so as to read: become final. Notwithstanding the provisions of section 3224 of the Revised Statutes, the making of such assessment or the be­ SEC. 204. Insurance companies other than life or mutual: (a) ginning of such proceeding or distraint during the time such Imposition of tax.-In lieu of the tax imposed by section 13 of prohibition is in force may be enjoined by a proceeding in the this title, there shall be levied, collected, and paid for each taxable proper court. year upon the net lncome of every insurance company (other than a life or mutual insurance company) a tax as follows: The amendment was agreed to. (1) In the case of such a domestic insurance company, 13%. The next amendment was, on page 174, after line 9, to percent of the amount of lts net income in excess of the credit provided in subsection (f) of this section. insert: (2) In the ca.se of such a foreign insurance company, 13% (c) Omission from gross income: If the taxpayer omits from percent of the amount of its net income from sources within the gi·oss income an amount properly includible therein which is in 1934 CONGRESSIONAL RECORD-SENATE 5867 excess of 25 percent of the amount of gross income stated in the I at the time of his death of all property, real or personal, tangible return, the tax may be assessed, or a proceeding in court for the or intangible, wherever situated, except real property situated collection of such tax may be begun without assessment, at any outside the United States." time within 5 years after the return was filed. The amendment was agreed to. The amendment was agreed to. The next amendment was, on page 196, line 13, to insert The next amendment was, on page 174, line 17, before the section 405, "Estate Tax Rates." word "For", to strike out "(c)" and insert "(d) "; in the Mr. REED. Mr. President, this amendment had better same line, after the article "(a)", to strike out "and (b) ·" go over. and insert "(b), and (c) ",so as to read: Mr. HARRISON. Yes. (d) For the purposes of subsections (a), (b), and (c), a return The PRESIDING OFFICER. The amendment will be filed before the last day prescribed by law for the filing thereof passed over. shall be considered as filed on such last day. Mr. REED. What I meant was the new paragraph com- The next amendment was, on page 174, line 21, before the mencing in line 13. word "corporation'', to strike out "(d)" and insert "(e) ", Mr. HARRISON. Yes; that should go over. so as to read: The next amendment was, on page 198, after line 12, to (e) Corporation and shareholder: If a corporation makes no insert: return of the tax imposed by this title, but each of the share­ SEC. 406. Nondeductibllity of certain transfers: Section 303 (a) holders includes in bis return his distributive share of the net (3) and section 303 (b) (3) of the Revenue Act of 1926, as income of the corporation, then the tax of the corporation shall amended, are amended by inserting after "individual", wherever be assessed within 4 years after the last date on which any sucl1 appearing therein, a comma and the following: " and no substan­ shareholder's return was filed. tial part of the activities of which is participation in partisan pol1tics or is carrying on propaganda, or otherwise attempting to Mr. REED. Mr. President, the amendments on page 174 influence legislation." are of considerable importance. Mr. HARRISON. Yes; let them be passed over. Mr. HARRISON. Mr. President, let that go over. Th.ere The PRESIDING OFFICER. The amendments will be may be some question as to it. passed over. The PRESIDING OFFICER. The amendment will be The next amendment was, on page 175, after line 3, to passed over .. strike out: The next amendment was, under the heading " Title m­ Amendments to prior acts and miscellaneous", on page 198, (a) No return or false return: If the taxpayer falls to file a return, or files a false or fraudulent return with intent to evade line 23, before the word "petition", to strike out "of" and tax, or omits· from gross income an amount properly includ1ble insert "for"; in line 25, after the figures " 1926,", to insert therein which is in excess of 25 percent of the amount of gross " section 308 (a) of the Revenue Act of 1926, section 513 (a) income stated in the return, the tax may be assessed, or a proceed­ ing in court for the collection of such tax may be begun without of the Revenue Act of 1932,"; on page 199, line 6, after the assessment, at any time. words "striking out", to insert ""not counting Sunday as the "; and in line 7, after the word " thereof ", to insert And in lieu thereof to insert: " " not counting Sunday or a legal holiday in the District of (a) False return or no return: In the case of a false or fraudu­ Columbia as the '', so as to make the section read: lent return with intent to evade tax or of a failure to file a. return the tax may be assessed, or a proceeding in ,court for the collection SEC. 501. Period for petition to Board under prior acts: Section of such tax may be begun without assessment, at any time. 274 (a) of the Revenue Act of 1926, section 308 (a) of the Revenue Act of 1926, section 513 (a) of the Revenue Act of 1932, and sec­ Mr. REED. Mr. President, I think this amendment ought tion 272 (a) of the Revenue Act of 1928 and the Revenue Act of to be passed over along with the other. 1932 (relating to the period during which a taxpayer may petition the Board of Tax Appeals for redetermination of a deficiency) are Mr. HARRISON. It is merely a clerical change. amended by striking out " 60 days " and inserting in lieu thereof Mr. REED. I do not see the effect of the change from a "90 days"; by striking out "not counting Sunday as the sixtieth quick reading. day" and inserting in lieu thereof "not counting Sunday or a legal holiday in the District of Columbia as the ninetieth day"; Mr. HARRISON. It is existing law. The clerks tell me and by striking out " 60-day " and inserting in Ueu thereof it is merely a clerical change. "90-day." The amendments made by this section shall apply only The PRESIDING OFFICER. The question is on agreeing in respect of notices mailed after 30 days after the date of the to the amendment. enactment of this act. The amendment was agreed to. The amendment was agreed to. The next amendment was, on page 190, after line 3, to in­ The next amendment was, on page 199, line 25, after the sert a new title, " Title I-A." word "barred", to strike out "at the time" and insert "on Mr. HARRISON. Let that go over. It relates to personal the date", so as to make the section read: holding companies. SEc. 502. Recovery of amounts erroneously refunded: (a) Sec­ tion 610 of the Revenue Act of 1928 is amended by adding at the The PRESIDING OFFICER. The amendment will be end thereof a new subsection to read as follows: passed over. "(c) Despite the provisions of subsections (a) and (b) such The next amendment was, on page 194, line 21, after the suit may be brought at any time within 5 years from the making of the refund if it appears that any part of the refund was figures " 1926,", to insert "as amended", so as to read: induced by fraud or the misrepresentation of a material fact." SEC. 402. Prior taxed property: Paragraph (2) of subdivision (a) (b) The amendment made by subsection (a) of this section and paragraph (2) of subdivision (b) of section 303 of the Rev­ shall not apply to any suit which was barred on the date of the enue Act of 1926, as amended, are amended by inserting before enactment of this act. the period at the end of the second sentence of each such para­ graph a comma and the following: "and only 1f in determining The amendment was agreed to. the value of the net estate of the prior decedent no deduction The next amendment was, on page 200, after line 9, to was allowable under this paragraph in reapect of the property or strike out: properties given in exchange therefor." (a) The last sentence of section 322 (d) of the Revenue Act of Mr. HARRISON. Let that amendment go over. 1932 and of the Revenue Act of 1928 and of section 528 (d) of the Revenue Act of 1932 are amended to read as follows: "No The PRESIDING OFFICER. The amendment will be such credit or refund shall be made of any portion of the tax passed over. unless the Board determines as part of its decision that it was The next amendment was, at the top of page 196, to paid within 3 years before the filing of the claim or the filing of insert: the petition, whichever is earlier." SEC. 404. Real estate situated ·outside the United States;: So And in lieu thereof to insert: much of section 302 o! the Revenue Act of 1926 as reads as fol­ (a) The last sentence of section 322 (d) of the Revenue Act of lows: "The value of the gross estate of the decedent shall be 1932 and of the Revenue Act o! 1928 are amended to read as fol­ ,determined by including the value at the time of his death of all lows: "No such credit or refund shall be made of any portion of property, real or personal, tangible or intangible, wherever sit­ the tax unless the Board determines as part of its decision that uated" is amended to read as follows: "The value of the gross ·it was paid within 2 years before the filing of the clalln or the estate of the decedent shall be determined by including the value filing of the petition, whichever 1s earlier." LXXVIII--371 5868 CONGRESSIONAL RECORD-SENATE APRIL 2 (b) The last sentence or section 528 (d) or the Revenue Act or The PRESIDING OFFICER. The amendment will be 1932 is amended to read as follows: "No such credit or refund shall be made of any portion of the tax unless the Board deter­ passed over. mines as part of its decision that it was paid within 3 years before The next amendment was, on page 21 l, line 9, to change the filing of the claim or the filing of the petition, whichever is the section number from "515" to "514." earlier." The amendment was a.greed to. The amendment was agreed to. The next amendment was, on page 211, after line 15, to The next amendment was, on page 201, line 7, before the insert: word "The", to strike out "(b)" and insert "(c) ", so as to SEC. 515. Commissioner as party to suit: Section 907 of the read: Revenue Act of 1924, as amended, is amended by adding at the end thereof a new subdivision to read as follows: (c) The last sentence of section 284 (e) of the Revenue Act of "(g) Petitions filed after the enactment of the Revenue Act of 1926, as amended, is amended to read as follows: "Unless the 1934 with the Board shall be entitled "In re", followed by the Board determines as part of its decision that the claim for credit name of the petitioner, and the proceedings shall thereafter be so or refund, or the petition, was filed within the time prescribed in entitled in any appellate court reviewing the action of the Board. subdivision (g) for filing claims, no such credit or refund shall be When the incumbent of the ofiice of Commissioner of Internal made of any portion of the tax unless the Board determines as Revenue changes, no substitution of the name of his successor part of its decision that it was paid within 4 years (or, in the case shall be required in proceedings pending before any such court." of a tax imposed by this title, within 3 years) before the filing of the claim or the filing of the petition, whichever is earlier." The amendment was agreed to. The amendment was agreed to. The next amendment was, on page 212, after line 3, to The next amendment was, on page 201, line 18, before the insert: word " The '', to strike out "(c)" and insert "(d) ", so as to SEC. 516. Nondeductibility of certain gifts: (a) Section 505 (a) (2) (B) and section 505 (b) (2) of the Revenue Act of 1932 are read: amended by inserting after " individual " a com.ma and the follow­ (d) The last sentence of section 319 (c) of the Revenue Act of ing: " and no substantial part of the activities of which is par­ 1926, as amended, is amended to read as follows: "No such refund ticipation in partisan politics or is carrying on propaganda, or shall be made of any portion of the tax unless the Board deter­ otherwise attempting to infiuence legislation." mines as part of its decision that it was paid within 4 years (or, {b) Section 505 (b) (3) of the Revenue Act of 1932 is amended 1n the case of a tax imposed by this title, within 3 years) before by inserting after " animals " a comma and the following: " no the filing of the claim or the filing of the petition, whichever is substantial part of the activities of which is participation in earlier." partisan politics or is carrying on propaganda, or otherwise at­ tempting to influence legislation." The amendment was agreed to. The next amendment was, on page 202, line 1, before the The amendment was agreed to. word "The", to strike out "(d)" and insert "(e) ", and in Mr. HARRISON. I prefer that all the amendments relat- line 2, before the word "of", to strike out "and (c)" and ing to the excise taxes be passed over. insert "(c), and (d) '', so as to read: Mr. REED. Section 516 ought to go over. (e) The amendments made by subsections (a), (b), (c), and Mr. HARRISON. Yes; that should be passed over. (a) of this section shall have no effect in the case of any proceed­ The PRESIDING OFFICER. Section 516 will be passed ing before the Board on a petition if any hearing by the Board over. thereon has been held prior to 30 days after the date of the enact­ Mr. HARRISON. The amendments relating to the tax on ment of this act. certain oils should go over. The amendment was agreed to. The PRESIDING ' OFFICER. Without objection, all of The next amendment was, on page 203, line 3, before the title 4 will be passed over. 5, word "of", to insert "(a)", and in line before the words EXECUTIVE SESSION " The Secretary ", to strike out " " Sec. 1108." and insert ""(a)", so as to read: Mr. ROBINSON of Arkansas. I move that the Senate proceed to the consideration of executive business. SEC. 506. Retroactivity of regulations, rulings, etc.: Section 1108 (a) of the Revenue Act of 1926, as amended, is amended to read The motion was agreed to; and the Senate proceeded to as. follows: the consideration of executive business. "(a) The Secretary, or the Commissioner with the approval of EXECUTIVE MESSAGE REFERRED the Secretary, may prescribe the extent, it any, to which any rul­ ing, regulation, or Tr.easury Decision, relating to the internal­ The PRESIDING OFFICER (Mr. McGILL in the chair) revenue laws, shall be applied without retroactive effect.'' laid before the Senate a message from the President of the The amendment was agreed to. United States submitting a nomination in the Marine Corps, The next amendment was, at the top of page 205, to strike which was referred to the Committee on Naval Affairs. out:

DIPLOMATIC AND FOREIGN SERVICE Okla., will be recommitted to the Committee on Post Offices The legislative clerk read the nomination of George S. and Post Roads. Without objection, the other nominations Messersmith, of Delaware, to be Envoy Extraordinary and will be confirmed en bloc. Minister Plenipotentiary to Austria. That completes the calendar. The PRESIDING OFFICER. Without objection, the RECESS nomination is confirmed. The Senate resumed legislative session. The legislative clerk read the nomination of Carol H. Mr. ROBINSON of Arkansas. I move that the Senate Foster, of Maryland, to be consul general. take a recess until tomorrow at 12 o'clock noon. The PRESIDING OFFICER. Without objection, the The motion was agreed to; and (at 5 o'clock and 30 min­ nomination is confirmed. utes p.m.> the Senate took a recess until tomorrow, Tuesday, DEPARTMENT OF COMMERCE April 3, 1934, at 12 o'clock meridian. The legislative clerk read the nomination of Bryan M. Battey, of New York, to be Assistant Commissioner of Pat­ NOMINATION ents. Executive nomination received by the Senate April 2 (legis­ The PRESIDING OFFICER. Without objection, the nom­ lative day of Mar. 28), 1934 ination is confirmed. Mr. COPELAND. Mr. President, I ask unanimous consent APPOINTMENT IN THE NAVY that the President be notified of this confirmation. The MARINE CORPS nomination was delayed on account of my own failure to Corp. Edward L. Hutchinson, a meritorious noncommis­ report on it. I understand that this officer is very much sioned officer. to be a second lieutenant in the Marine Corps, needed, and I am asked by the Chairman of the Committee revocable for 2 years, from the 2d day of March 1934. on Patents, the Senator from California £Mr. McAnoo], to make this request. CONFIRMATIONS Mr. McNARY. Mr. President, I did not understand the nature of the request. Executive nominations confirmed by the Senate April 2 Mr. ROBINSON of Arkansas. The Senator from New . 2568. An act granting a leave of absence to settlers of with and that on Wednesday it shall be in order to consider homestead lands during the years 1932, 1933, and 1934; business that would have been in order today. S. 2571. An act authorizing the Secretary of the Interior Mr. RANKIN. Mr. Speaker, will the gentleman yield? to arrange with States for the education, medical attention, Mr. BYRNS. Yes. relief of distress, arid social welfare of Indians, and for Mr. RANKIN. That includes suspensions, does it? other purposes; Mr. BYRNS. Yes; whatever business is in order today, if S. 2575. An act to define certain crimes against the United this request is granted, will be in order on Wednesday. States in connection with the administration of Federal Mr. HOPE. Mr. Speaker, reserving the right to object, penal and correctional institutions and to fix the punish­ does . the gentleman from Tennessee understand that the ment therefor; sugar bill will be brought up on Wednesday? S. 2584. An act for the relief of Elmer Kettering; Mr. BYRNS. That has been my general understanding. S. 2672. An act for the relief of Mabel S. Parker; Mr. HOPE. In that connection I wonder if we could not S. 2754. An act to add certain public-domain land in have some agreement as to an extension of time so far as Montana to the Rocky Boy Indian Reservation; the consideration of the sugar bill is concerned. S. 2809. An act conferring jurisdiction upon the Court of Mr. BYRNS. I think the gentleman from Texas [Mr. Claims to hear and determine the claims of the International JONES] will be reasonable in the matter of allowing time; but Arms & Fuze Co., Inc.; I do want to say to the gentleman from Kansas that we S. 2835. An act to amend section 21 of the act approved have quite a number of other suspensions, and we have quite ~une 5, 1920, entitled "An act to provide for the promotion a long Consent calendar, and t:Q.ere are some other matters and maintenance of the American merchant marine, to re­ that are pressing that will be ready the latter part of this peal certain emergency legislation, and to provide for the week. I hope whatever additional time is arranged for on c:fisposition, regµlation, and use of propert~ acquired there- the sugar bill can be made as short as possible. 5872 CONGRESSIONAL RECORD-HOUSE APRIL 2 Mr. HOPE. Of course, the sugar bill, in my judgment, ls I Mr. LUCE. Mr. Speaker, reserving the right to object, I one which should never be brought up under suspension do not understand the gentlema.n's request extends to giv­ anyway. It is a bill which ought to have more considera- ing opportunity for suspensions on Wednesday, other than tion with oppartunity for amendment; but I understand the those he has already referred to. domestic-sugar industry is very much interested in having Mr. BYRNS. Well, I do not know just what is on the list this bill go through at as early a date as possible, and I of the Speaker. Of course, the question of suspensions rests would not have any objection, under the circumstances, to altogether with the Speaker, and I do not know just what having it come up in this way if we may have adequate time suspensions he has in mind. I understand these three bills to discuss it. are on his list. Mr. BYRNS. How much time does the gentleman think Mr. LUCE. It was contemplated there should be adequate ought to be allowed? time for discussion of the home-loan-bond guarantee bill. Mr. HOPE. I should think a minimum of 1 hour on the Mr. BYRNS. I do not think that bill will be taken up. side. . That is one reason I am anxious to confine the considera- l\fr. BYRNS. I hope the gentleman will agree to reduce tion of these bills as much as we can so we may get to that that. If we could make it 40 minutes to the side, it would measure, possibly Thursday or not later than Friday. be very agreeable, especially if the gentleman and others Mr. LUCE. I merely wanted to be certain that bill will will promise to help . us keep the House in session on not be taken up under suspension. Wednesday until we can make up for the extra time con- Mr. BYRNS. I do not think, Mr. Speaker, that bill is to sumed and also consider some of the bills on the calendar, be taken up under suspension. because there are a number of Members interested in the Mr. STEAGALL. There will be no such effort, so far as Consent Calendar. I am concerned. Mr. JONES. Mr. Speaker, that will be satisfactory to The SPEAKER. It will not be taken up under suspension. me, if it is agreeable to the gentleman from Kansas. . Mr. JENKINS of Ohio. Mr. Speaker, reserving the right Mr. HOPE. Under the circumstances that will be agree- to. object, I should like to ask what effect the gentleman's re- able. quest has on the Consent Calendar. Mr. FISH. Mr. Speaker, reserving the right to object, I Mr. BYRNS. It simply postpanes consideration of the should like to ask the majority leader if he expects, with the Consent Calendar until Wednesday, if this request is Speaker's cooperation, to bring up Senator JOHNSON'S bill to granted, and makes it in order on Wednesday. prevent extending loans to foreign nations that have de- Mr. WOODRUFF. Mr. Speaker, reserving the right to faulted in the payment of their debts. object, if this unanimous-consent request is granted and Mr. BYRNS. The Speaker can answer that question bet- the House is to have 1 hour of debate on each side on the ter than I can, but I understand that is on his list. sugar bill-· - Mr. FISH. I have talked with the Chairman of the Com- Mr. BYRNS. I understood it was to be 40 minutes. mittee on Foreign Affairs, and I should like to make the same Mr. WOODRUFF. Even with that division of time, it is request for a limited additional time of 20 minutes more on not unreasonable to hope, I suppooe, that Members other the side. than members of the House Committee on Agriculture may Mr. BYRNS. We have made a concession with respect to have an oppartunity to submit certain observations on the the sugar bill. Would not the gentleman be willing to have bill. 30 minutes on each side or 1 hour for consideration of the Mr. BYRNS. That will rest with the gentleman from bill? Texas and whoever demands a second, and I understand a Mr. FISH. I am a good compromiser and a good bar- second will probably be demanded by the gentleman from gainer, and I accept that suggestion. Kansas [Mr. HoPEJ. Mr. BYRNS. And I hope no one else will make a similar The SPEAKER. Is there objection to the request of the request with respect to any of the other bills. gentleman from Tennessee? Mr. LUNDEEN. Mr. Speaker, if the gentleman will per- There was no objection. mit. I should like to inquire about the Minnesota fire suf- EXECUTIVE ORDER-VETERANS' LEGISLATION (H.DOC. NO. 296) ferers' bill. If today's business goes over, will this bill be The SPEAKER laid before the House the following mes- taken up tomorrow or Wednesday? sage from the President of the United States, which was Mr. BYRNS. It would be in order on Wednesday. read, · and, with the accompanying papers, referred to the Mr. LUNDEEN. I am very much interested in seeing that Committee on Expenditures in the Executive Departments the fire sufferers of northern Minnesota are compensated and ordered to be printed: and paid in full for the terrible damage they suffered many years ago. The fires were the result of Federal negligence, To the Congress of the United States: and the United States should pay the bill. Pursuant to the provisions of section 20, title I, of the act Something has been done-that is true. But these people entitled""An act to maintain the credit of the United States will never be satisfied until they are. fully reimbursed. The Government", approved March 20, 1933, I am transmitting Government can never pay for the agony and suffering­ herewith copies of Executive Orders No. 6661 to appoint a committee to act with the committee of the House. stood in recess, subject to the call of the Chair. Resolved, That invitations be extended to the President of the United States and the members of his Cabinet, the Chief Justice, and Associate Justices of the Supreme Court of the United States, AFTER RECESS the Diplomatic Corps (through the Secretary of State), the Chief of Staff of the Army, the Chief of Naval Operations of the Navy, The House was called to order by the Speaker at 1 o'clock the Major General Commandant of the Marine Corps, and the and 55 minutes p.m. Commandant of the Coast Guard to attend the funeral in the Hall I of the House of Representatives. Mr. BYRNS. Mr. Speaker, ask unanimous consent that the House stand in recess throughout the exercises. The resolution was agreed to. The SPEAKER. Is there objection? The SPEAKER. The Chair will state that under the terms There was no objection. of the legislative appropriation bill, which has passed the Accordingly (at 2 p.m.> the House stood in recess. House, he is authorized to appoint four Members as a funeral committee. The bill has not been enacted into law, but the RECESS-FUNERAL OF THE LATE REPRESENTATIVE EDWARD W. POtJ Chair assumes that it will be enacted into law and is ap­ ORDER OF SERVICE pointing four Members on the committee. Prayer______Dr. James Shera Montgomery. The Chair wishes also to state that a number of other Chaplain of the House of Representatives Members of the House will attend the funeral in an unoffi­ Selection______Quartet of St. Margaret's Episcopal Church Funeral Services____ The Chaplain of the House of Representatives cial capacity, including the minority leader, two members Address ______l\tlr. Speaker Rainey of the Rules Committee, the gentleman from Alabama, Mr. AddressSelection ______------Quartet Hon. Bertrand H. Snell BANKHEAD, the gentleman from New York, Mr. O'CONNOR, Selection ______: ______Quartet and the Speaker of the House and the entire North Caro­ Benediction______The Chaplain of the House of Representatives lina delegation, and others. The SPEAKER appointed as members to attend the At 2 p.m. the Vice President and Members of the Senate funeral Mr. WEAVER, Mr. BULWINKLE, MT. CLARK of North entered the Chamber and occupied the seats assigned to Carolina, and Mr. MARTIN of Massachusetts. them, the Vice President occupying a seat at the Speaker!s table. LEA VE OF ABSENCE Then came the Chief Justice and Associate Justices of the By unanimous consent, the following leaves of absence Supreme Court, who took the seats assigned to them. .were granted: The body of the late Mr. Pou lay in state in the space in To Mr. KocIALKOWSKI, indefinitely, on account of official front of the Clerk's desk. business. The Chaplain, Rev. James Shera Montgomery, D.D., offered To Mr. KNuTsoN, for 10 days. the following prayer: 5874 CONGRESSIONAL RECORD-HOUSE APRIL 2 Lift up your heads, O ye gates; be ye lifted up ye ever­ What an inspiration, what a comfort, and that other lasting doors, and the King of Glory shall come in. song, Eternal Goodness: Heavenly Father, renew in us the spirit that cleanses our And so beside the Silent Sea I wait the muffled oar; divided hearts and deliver us from all self-assurance. 0 speak No harm from Him can come to me through our thoughts and direct the counsels of our medita­ On ocean or on shore. tions. Almighty God, our hearts are bathed in emotion as I know not where His islands lift we wait in loving reverence in memory of one who8e superb Their fronded palms in air; character and wise statesmanship have contributed so I only kna..;r I cannot drift richly to our beloved country. He knew he1· history, he had Beyond His lov~ and care. learned her lessons, and he loved her institutions. All life Man is always seeking something. We look over our is richer for his having passed this way. Grant that the shoulders and see the pilgrims crowding about the stream influence of this noble son of Thine may live and remain an called "The Fountain of Youth." We see others flocking incentive to those of us who follow on. We are thankful near and far, seeking the beautiful, growing fields of beauty that his strong will was ever tempered by his mighty charity, and glory, "The Eldorado." And yonder is the man in my which flushed his placid face with an indescribable charm. thoughts who is ever seeking the "golden fleece", symboli­ Heavenly Father, we bless Thee for a life so beautiful in cal of the search of the human heart in all ages and in all faith, so full of devotion, and so full of renown. How we generations; and when we read the Holy Grail, it tells the rejoice that on Easter Morn, when the clouds and dark­ same story, namely, the quest of the human heart. Dear ness that had clustered about the morning star of hope had friends, and may I say neighbors, we learned two simple faded into a new and glorious day, the heavens opened and rules in natural philosophy, just two. Perhaps we could his pure white soul became immortal. Comfort all bereaved not remember another. One is that two bodies cannot ones, his colleagues, friends, and lead us all in peace up the occupy the same space at the same time. The other rule hill-slopes of time. Through Jesus Christ our Lord. Amen. is that matter is indestructible. That is to say, the lower A quartet from st. Margaret's Episcopal Church sang survives. I recall very directly the word of Mr. Edison the hymn, "Peace, Perfect Peace." when he was asked his greatest invention. He pointed to The Chaplain read the burial service. the electric light. In some form that substance will live. The CHAPLAIN. Just a word by request, dear friends. We Will God Almighty care for that substance and allow the' are this afternoon in the afterglow of earth's greatest day. mind that conceived it and planned it and toiled for it to How the multitudes of the wide world converge to one place, die? Burn a piece of coal and the ash and the gasses and that one place is a symbol of eternal hope and everlast­ equal the original bulk. Will God Almighty care for coal ing glory. What a secret hangs over the grave. I long and turn a deaf ear to the appeals of the heart that loved, since have learned, in some little way, not to work too hard to the breast that feels the throbs of undying, eternal senti­ at a lock where no complete key has been left. ments and emotions. My friends, listen. It cannot be so. What tears and what prayers hang over the tomb! And O yet we trust that somehow good yet we wonder, we wonder. Yet as a sailor coming back to Will be the final goal of ill, his homeland first scents the odors of the shoreline, as some To pangs of nature, sins of will, Launfal comes back to his home, and in the distance Defects of doubt, and taints of blood. hears the bells in the abbey, as in that picture, the Aurora, That nothing walks with aimless feet, That not one life shall be destroyed, the weary pilgr-im stops at the foothills and waits for the Or cast as rubbish to the void, glorious sunlight in all its radiant .beauty to break on the When God hath made the pile complete. mountain top, so we wait for a complete solution of the That not a worm is cloven in vain, mystery of immortality. I turn to Browning with these That not a moth with vain desire hours: Is shriveled in a fruitless fire, I see my way as the birds their paths; I shall arrive. Or but subserves another's gain. When the great philosopher and poet wrote that word of So runs my dream: but what am I? An infant crying in the night; inspiration, a transition came into his life. Before that An infant crying for the light; time, somewhat, he had been kneeling at the altar of Na­ And with no language but a cry. ture-Nature, beautiful, graceful, symmetrical, but still I stretch lame hands of faith, and grope, Nature. The big tree chokes to death the little tree. The And gather dust and chaff, and call big vine grips in a deathly hug the little vine. Nature is To what I feel is Lord of all, beautiful, but I find no great comfort in telling myself that And faintly trust the larger hope. God is omnipotent-my heart aches on; that God is omni­ It is the salvation of the world, namely, the undying hope present-my heart aches on; that God is all wisdom-my that beats everlastingly in the human breast. heart aches on. So in the hour of Browning's sorrow he In conclusion, we are now, as I said in the beginning, went out for an afternoon walk, and the glorious, radiant standing in the afterglow of Easter Morning. At this mo­ moments of the late afternoon were passing away, dying ment I am reminded of what I may be permitted to call the down into the mysterious depths of holy night. He returned second great prayer of the world: home, and he wrote: Lord, remember me when Thou comest into Thy kingdom. While I was walking, the birds were still singing, the flowers • • • Verily, I say unto thee, today shalt thou be with me in were still blooming, the waters were still rippling, and my heart Paradise. was still aching. The first trophy of the cross was a human soul, and Then and there he saw the light of a new and beautiful perhaps the institutions of the time, and of his day, had experience. made him the wicked man that he was, and yet he was Then that sweet and beautiful song, To a Waterfowl, by ushered through the gates of Paradise by our loving Savior. ~, illiam Cullen Bryant: A poem in a London drawing room I picked up one day: There ls a power whose care Teaches thy way along that pat}?.less coast­ So I stand by the cross on the lone mountain crest, The desert and illimitable air- Looking toward the ultimate sea; Lone wandering, but not lost. In the gloom of the mom a ship lies at rest, • • • • • And one sails away from the lea. He who, from ·zone to zone, One spreads its white sails on a far-reaching track. Guides through the boundl.ess sky they certain flight, With pennant and sheet flowing free; In the long way that I mu1>t tread a.lone, One lies in the shadows with sails aback. Will le.ad my steps aright. The ship that is waiting for me. 1934 CONGRESSIONAL RECORD-HOUSE 5875 But lo! 1n the distance the clouds break away, of hic; life at his post here in the House of Representatives, The gates glowing portals I see; discharging efficiently and ably the important duties of his I hear from the outgoing ship in the bay A song of the sailors in glee. position. During the period of the World War he made his full So I think of the luminous footsteps that bore Him safe o'er dark Galilee, share of sacrifices for his country. On Armistice Day, and And I wait for my ship to go to that shore-­ just before the peace program was put in operation, his son In the ship that is waiting for me. was killed in action on a battlefield of northern France. These 14 years I have passed in and out of this Chamber, In his death all of us who were so closely associated here I seldom said " Mr. Pou "; I said " Brother Pou "; he was so with him experience a strong sense of personal loss. kindly and brotherly. There was a dignified simplicity in I like to think of life as a journey over a broad highway. his beautiful character. Today in my study I was thinking We start out in the morning traveling over a road watered the sentiments of Tennyson when he lost one of his dear with last night's rains, and the journey is always upward. friends: There are those who branch out from the main traveled Break, break, break; 'highway and go along into untraveled paths on either side. On thy cold gray stones, 0 sea! · These are the pioneers; and finally, if they are successful in And I would that my tongue could utter The thoughts that arise in me. what they undertake, the highway of life broadens out and takes in also the paths over which they have traveled. A 0, well for the fisherman's boy, That he shouts with his sister at play! better and a wider highway is made for those who follow. 0, well for the sailor lad, As we go along, there are places where the green ferns That he sings in his boat on the bay! grow, and we ought to linger there, and ED Pou knew how And the stately ships go on to do that. As we travel along, there are meadows where To their haven under the hlll; dreams come true, and En Pou found them many times, and But 0 for the touch of a vanished hand, so have you. And along the journey there are fields where And the sound of a voice that is stlll! the four-leaf clovers grow; they are the prizes of this life; Break, break, break, and En Pou found them many times, and so have you. As At the foot of thy crags, 0 seal But the tender grace o! a day that is dead we journey along, always upward, there comes always the Will never come back to me. call of the crest; and when you reach it, there is another All that is left of our dear splendid friend and brother ascent and another crest and another call, and so the journey will soon be taken to his Carolina home, down yonder under is always upward until there comes a call at the last crest, the beautiful radiant skies, where the flowers and cypress and it comes always from the uttermost places that lie at the back of the sun. Some hear it early in life, some late in grow, and I think if I could interpret his word this moment life, when they have had much of service back of them, as it could be said in the language of Robert Louis Stevenson: En Pou had, but it comes sooner or later to all. It is the Under the wide and starry sky, great adventure of this life; and when we hear it, we slip our Dig the grave and let me lie. Glad did I live, and gladly die, anchors and sail away over unknown seas to an unknown And I laid me down with a wlll. shore where at anchor lie the craft of those of our friends This be the verse you grave for me: who have gone before. " Here he lies where he longed to be; Over the grave of EDWARD WILLIAM Pou may the snows of Home is the sailor, home from the sea, winter lie light; over his grave may the winds of winter And the hunter home from the hill." blow low; over his grave may the birds throughout the long Blessings on his sweet and beautiful memory. He made summer days to come sing always their sweetest songs. me think good thoughts. He inspired me to lead a good life. Good night, old friend, good night! I shall prize his memory for many and many a day. The SPEAKER resumed the chair. Mr. SABA TH assumed the chair as Speaker pro tempore. Selection by the quartet. FUNERAL SERVICES OF HON. EDWARD WILLIAM POU, 011' NORTH CAROLINA Mr. SNELL. The death of EDWARD W. Pou casts gloom Mr. RAINEY. Born in Alabama, educated in the Uni­ over his colleagues in the House of Representatives. Not versity of North Carolina, a Presidential elector, solicitor only was he dean in length of service in the House of Repre­ for the fourth judicial district of North Carolina, 34 years sentatives but he was dean as well in the true affections of a Member of Congress, Chairman of the powerful Commit­ its Members. tee on Rules of the House of Representatives-this is a brief In the beginning of the Sixty-fifth Congress I was assigned outline of the busy useful life of Hon. EDWARD WILLIAM to the Rules Committee. Mr. Pou was its chairman, and Pou, whose body lies here today. from the very first I learned to admire and respect hi.in. His death removes from this body the last of its Members His character, ability, and personal charm attracted me. who were here when I came, 30 years ago. During that long This early friendship matured and ripened during the inter­ period of time I have been closely associated with him in vening 18 years and will always remain with me as a the work of the Congress, and I have learned to admire and cherished memory. respect in the very highest degree his qualities as a man, a As I served under Mr. Pou when he was Chairman of the statesma~ and a citizen. He will be missed here in the Rules Committee, likewise he was the ranking minority House as few men are missed. member of that committee during the 8 years I was its chair­ Tomorrow, accompanied by the official committee of the man; yet during the 14 years we were on that committee House and Senate, by his family, and by his personal together, never was there the slightest misunderstanding, friends, his body will complete its journey back to the State although many times we were impelled to take opposing he has represented in the Congress so long and so ably, positions at the committee table and on the floor of the back to the people he loved and who loved him. House. It will be hard to fill his place. When a great tree crashes It fell to our lot, his and mine, to oppose each other more in the forest, it leaves a space which is not filled again for frequently in debate, I dare say, than any other two Mem­ many decades of time. bers, on account of the necessity of presenting our party's His long life was characterized alway·s by intense patriotism respective positions. But, party considerations aside, we and devotion to duty. During the period of the World War seldom disagreed on fundamentals. he was Chairman of the great Rules Committee of the The last time I talked with Mr. Pou, just a few days ago, House; and again, during the present war against depres­ he referred to our long and pleasant association on the Rules sion, he occupied that dignified, powerful, and influential Committee. position. He carried on even during the last 3 years, when En Pou was more than just an ordinary Member. His in­ his physical powers were weakened, but his mind remained fluence was more than just what he said in debate. His perfectly clear and intensely active during his years of constituents recognized this in keeping him here to serve illness, and he was found always and until the last few days them. He was fast approaching the record set by the late 5876 CONGRESSIONAL RECORD-HOUSE APRIL a Gilbert N. Haugen for the longest continuous service in the Mr. DIMOND: Committee on the Public Lands. H.R. House. This long service, his personal charm, and his fine 6179. A bill to amend an act entitled "An act to provide for ability just naturally spread a stabilizing influence over all the leasing of coal lands in the Territory of Alaska, and for with whom he came in contact. other purposes"; with amendment

AFTER RECESS PUBLIC BILLS AND RESOLUTIONS The House was called to order by the Speaker at 2 Under clause 3 of rule XXII, public bills and resolutions o'clock and 45 minutes p.m. were introduced and severally referred as follows: Mr. BYRNS. Mr. Speaker, I ask unanimous consent that By Mr. LEA of California: A bill CH.R. 8906) to provide the order of services for the funeral exercises of the late funds for cooperation with the public-school board at Representative EDWARD W. Pou and the proceedings there­ Covelo, Calif., in the construction of public-school buildings under be printed in today's RECORD. to be available to Indian children of the Round Valley Res .. The SPEAKER. Is there objection? ervation, Calif.; to the Committee on Indian A:ffairs. There was no objection. By Mr. SUMNERS of Texas: A bill CH.R. 8907) to give DESIGNATION OF SPEAKER PRO TEMPORE the Supreme Court of the United States authority to make The SPEAKER. The Chair designates the gentleman and publish rules in actions at law; to the Committee on the from Illinois [Mr. SABATH] to preside over the sessions of Judiciary. the House tomorrow. By Mr. PARSONS: A bill CH.R. 8908) to extend the times ADJOURNMENT for commencing and completing the construction of a bridge Mr. BULWINKLE. Mr. Speaker, as a further mark of across the Ohio River at or near Shawneetown, Gallatin respect to the memory of our dead colleague, I move that County, Ill., and a point opposite thereto in Union County, the House do now adjourn. Ky.; to the Committee on Interstate and Foreign Com .. The motion was agreed to; accordingly Cat 2 o'clock and merce. 46 minutes p.m.) the House adjourned until tomorrow, By Mr. FLETCHER: A bill CH.R. 8909) to authorize the Tuesday, April 3, 1934, at 12 o'clock noon. Secretary of the Treasury to amend the contract for sale of post-office building and site at Findlay, Ohio; to the Com .. mittee on Public Buildings and Grounds. COMMITTEE HEARINGS By Mr. BLOOM: A bill m.R. 8910) to establish a Na.. t>UBCOMMITTEE OF THE COMMITTEE ON IMMIGRATION AND NATURALIZATION tional Archives of the United States Government, and for other purposes; to the Committee on the Library. (Tuesday, Apr. 3, 10:30 a.m.) By Mr. PARSONS: A bill (H.R. 8911) providing for pay.. Hearing on H.R. 6912 in room 445, old House Office ments in lieu of transportation in kind and subsistence en Building. route to certain veterans of the War with Spain and the Philippine insurrection; to the Committee on Military Af .. EXECUTIVE COMMUNICATIONS, ETC. fairs. 397. Under clause 2 of rule XXIV, a letter from the Secre­ By Mr. SUMNERS of Texas: A bill CH.R. 8912) to amend tary of the Senate of Puerto Rico, transmitting a certified section 35 of the Criminal Code of the United States; to the copy of concurrent resolution of the Puerto Rican Senate Committee on the Judiciary. and House of Representatives expressing gratitude to the By Mr. SWANK: A bill m.R. 8913) to regulate inter· President and Congress of the United States for economic state commerce by granting the consent of Congress to the rehabilitation measures extended to the island, was taken several States to levy certain taxes upon property and from the Speaker's table and referred to the Committee on capital employed, business done, and sales made in inter­ Ways and Means. state commerce; limiting the power to levy such taxes to property and capital employed, business done, and sales REPORTS OF COMMITTEES ON PUBLIC BILLS AND consummated within such State; preventing double taxa· RESOLUTIONS tion; and prohibiting political subdivisions of any State Under clause 2 of rule XIII, from levying taxes or excises upon such property and capital Mr. SUMNERS of Texas: Committee on the Judiciary. employed, business done, and sales made in interstate com .. H.R. 8883. A bill limiting the operation of sections 109 and merce; to the Committee on Interstate and Foreign Com .. 113 of the Criminal Code and section 190 of the Revised merce. Statutes of the United States with respect to counsel in the By Mr. BURNHAM: A bill (H.R. 8914) amending the case of United States of America v. Weirton Steel Co. and Shipping Act, 1916, as amended, for the purpose of further other cases; without amendment (Rept. No. 1112). Referred regulating common carriers by water; to the Committee on to the House Calendar. Merchant Marine, Radio, and Fisheries. :1934 CONGRESSIONAL RECORD-HOUSE 5877 By Mr. DUNCAN of Missouri: A bill CH.R. 8915) to way Labor Act; to the Committee on Interstate Commerce. amend the National Defense Act of June 3, 1916, as 3457. Also, resolution adopted by the New York Typo­ amended; to the Committee on Military Affairs. graphical Union, No. 6, New York City, favoring House bill By Mr. BRUNNER: A bill (H.R. 8916) to permit ship­ 7598 by Congressman LUNDEEN; to the Committee on Labor. ment of intoxicating liquors via parcel post; to the Com­ 3458. Also, letter from the Brotherhood Railroad Signal­ mittee on the Judiciary. men of America, favoring the Crosser bill containing amend­ By Mr. SOMERS of New York: A bill , New York C1ty, favoring the passage of the York City, opposing the Fletcher-Rayburn securities bill; to Lundeen bill IB.R. 7598); to-the Committee on Labor. the Committee on Interstate and Foreign Commerce. S5UO. Also, petition of the J. & J. W~ Elsworth Co., New 3483. Also, petition of the .Sterling .Bag Co., Brooklyn, N.Y., York City, favoring appropriations for the building of two urging support of the Jones sugar bill \H.R. 8861); to the ice breakers for the Coast Guard at the New Landon Coast Committee on Agriculture. Guard Base, New London, Co~; t{) the Committee on -3484 . .Also, letters of Joseph Krall, Grueneberg family, Appropriations. John Hughes, and other.s, Brooklyn, N.Y., opposing 'the 3501. Also, petition of Brotherhood Railroad .Signalmen of Fletcher-Rayburn bill; to the Committee on Interstate and America, favoring certain proposed legislation in the interest Foreign Commerce. of railroad employees; to the Committee on Labor. 3485. Also, petition of Somers & Conzen Coal Corparation, 3502. Also, petition of the C-0rk Import Corporation, New Brooklyn, NS., opposing the passag€ of the Fletcher-Ray­ York City, opposing the passage of the tariff bill, H.R. '8430; burn bill in its present form; ro the Committee on Interstate to the Committee on Ways and Means. and Foreign Commerce. 3503. Also, petition of the Plunket-Webster Lumber Co., 34.86. Also, memorial of the Senate of the State nf New New York, favoring the passage of House bill 84-03, with cer­ York, Albany, N.Y., urging mactnrent of ~uch measures as tain amendments; to the Committee on Banking and Cur­ wm prohibit all public -restaurants under its 'COlltrol and reney. management from discriminating against patrons thereof 3504. Also, petition of the Cork Import Corporation, New because of race, creed, or eolor; to the Committee on Ac­ York City, opposing the passage of the Wagner labor bill; counts. to the CUmmittee on Labor. 3487. Also, petition of the Congoleum-Nairn, Inc., Kearney, N.J., opposing the passage nf the National Securities Ex­ 3505. Also, petition of the Permatex Co., Inc., Brooklyn, N.Y., opposing the passage of the Wagner-Connery labor­ change.Act of 193~ in its present form; to the Committee on Interstate and Foreign Commerce. dispute bill; to the Committee on Labor. 3488. Also, petition of Harold M. Brummer, New York City, 3506. Also, petition of Richey, Browne & Donald, New urging defeat of the Fletcher-Raylrurn bill; to the Commit­ York City, opposing the passage of House bill 8423; to the tee on Interstate and Foreign Commerce. Committee on Labor. 3489. Also, petition of the Armstrong Cork Co., Lancaster, 3507. Also, petition of the Holden-Leonard Co., Inc., New Pa., opposing the National Seeurtties Exchange Act of 19'34; York City, opposing the passage o'f the Wagner labor bill; to the Committee on Interstate -and Foreign Commerce. to the Committee on Labor. 3490. Also, petition of the National Enameling & Stamp­ 3508. Also, petition of the National Enameling & Stamping ing Oo., New York City. cppasing the Fletcher-Rayburn bill Co., New York City, oppasing the passage of the Fletcher­ in its _present form; to the Committee on Interstate and Rayburn stock-exchange control bill; to the Committee on Foreign Commerce. , Interstate and Foreign Commerce. 3491. Also, petition of -the Doane-Commercial Towing Co., ' 3509. Also, petition of Margaret K. Brown, Goldens Boston, Mass., opposing the enactment of House bill 19'ro; Bridge, N.Y., opposing the passage of the Fletcher-Rayburn to the Committee on Merchant Marine, Radio, and Fisheries. stock-exchange control bill; to the Committee on Interstate 3492. Also, petition of the Plunkett Webster Lumber Co., and Foreign Commerce. Inc., New Rochelle, N.Y., concerning Rouse bill 8403; to the 3510. Also, petition of Harold J. Brummer, New York City, Committee on Banking and currency. opposing the passage of the Fletcher-Rayburn stock-ex­ 3493. By Mr. LUCE: Resolution of the Massachusetts change control bill; to the Committee on Interstate and House of Representatives, regarding the imposition -0f fur­ Foreign Commerce. loughs to eml)loyees in the Postal Service; to the Committee 3511. Also, memorial of the Legislature of the State of on the Post Office and Post Roads. New York, favoring the enactment of such legislation -as 3494. Also, resolutions of the House of Representatives, will prohibit -all public restaurants under its control and Massachusetts General Court, urging enactment of legis­ management from discriminating against patrons thereof lation to promote the establishment .of unemployment in­ because of Tace, creed, or color; to the Committee on Ac­ surance or unemployment reserves in the several States by counts. providing certain tax relief to employers in those States 3512. Also, petition of the Puerto Rico Sugar Producers which have appropriate Jaws in this regard; to the Com­ Association, New York, opPQSing the passage of the new mittee on Ways and Means. sugar bill as highly discriminatory against Puerto Rico; to 3495. By Mr. MARTIN of Massachusetts: Memorial of the the Committee on Agriculture. Massachusetts House of Representatives, urging the enact­ 3.513. Also, petition of the International Longshoremen's ment of legislation to promote the establishment of unem­ Association, favoring the passage of the Jones sugar bill ployment insurance or unemployment reserves in the sev­ (H.R. 8861); to the Crunmittee on Agriculture. eral States by _providing eertain tax relief to employers in 3-514. Also, petition of the Luckenbach Steamship Co., those States which have appropriate laws .in this regard; New York City, opposing the passage of House bill 7667; to to the Committee on Labor. the Committee on Merchant Marine, Radio, and Fisheries. f934 CONGRESSIONAL RECORD-SENATE 5879

- 3515. Al~o. petition of the Allied Printing Trades Council Erickson Johnson Neelr Steiwer Fess Kean Norris Thomas, Okla. of Greater New York, favoring the Connery 30-hour work Fletcher Keyes Nye Thomas, Utah bill; to the Committee on Labor. Frazier King O'Mahoney Thompson George La Follette Overton Townsend 3516. Also, petition of Congoleum-Nairn, Inc., Kearny, Gibson Lewis Patterson Tydings N.J., opposing the passage of the Fletcher-Rayburn stock­ Glass Logan Pittman Vandenberg exchange control bill; to the Committee on Interstate and Goldsborough Lonergan Pope Van Nuys Gore Long Reed Wagner Foreign Commerce. Hale McAdoo Robinson, Ark. Walcott 3517. Also, petition of the Holden-Leonard Co., Inc., New Harrison McGill Russell Walsh York City, opposing the passage of the Fletcher-Rayburn se­ Hastings McKellar Schall White Hatch McNary Sheppard curities bill; to the Committee on Interstate and Foreign Hayden Metcalf Shipstead Commerce. Hebert Murphy Smith 3518. Also, petition of the Armstrong Cork Co., Lancaster, Mr. LEWIS. I desire to announce the absence of the Pa., opposing the passage of the National Securities Ex­ Senator from Florida [Mr. TRAMMELL], of the senior Sena­ change Act of 1934; to the Committee on Interstate and tor from North Carolina [Mr. BAILEY], of the junior Sen­ Foreign Commerce. ator from North Carolina [Mr. REYNOLDS], of the Senator 3519. Also, petition of the Dellwood Elevator Co., Division from Ohio [Mr. BULKLEY], of the Senator from Nevada [Mr. Archer, Daniels Midland Co., Buffalo, N.Y., opposing the McCARRAN], and of the Senator from Mississippi [Mr. stock-exchange control bill; to the Committee on Interstate STEPHENS], who are necessarily detained, and the absence and Foreign Commerce. of the Senator from Montana [Mr. WHEELER], occasioned 3520. Also, petition of the International Agricultural Cor­ by illness. poration, Albany, Ga., opposing the passage of the security Mr. HEBERT. I desire to announce that the Senator exchange bill; to the Committee on Interstate and Foreign from West Virginia [Mr. HATFIELD] and the Senator from Commerce. Indiana [Mr. ROBINSON] are necessarily detained from the 3521. Also, petition of Frank J. McCabe, New York City, Senate. opposing the Fletcher-Rayburn stock exchange control bill The VICE PRESIDENT. Eighty-five Senators have an­ in its present form; to the Committee on Interstate ad For­ swered to their names. A quorum is present. eign Commerce. REPORT OF THE RECONSTRUCTION FINANCE CORPORATION 3522. Also, petition of the Somers & Conzen Coal Corpo­ ration, Brooklyn, N.Y., opposing the passage of Fletcher­ The VICE PRESIDENT laid before the Senate a letter Rayburn stock exchange control bill; to the Committee on from the Chairman of the Reconstruction Finance Corpora­ Interstate and Foreign Commerce. tion, submitting, pursuant to law, a report covering the 3523. By Mr. SNEIL: Petition of residents of Gouverneur, operations of the Corporation for the fourth quarter of N.Y., relative to paper industry; to the Committee on Ways 1933 and the period from its organization on February 2, and Means. 1932, to December 31, 1933, inclusive, which, with the ac­ 3524. Also, petition of employees of the New York Tele­ companying papers, was referred to the Committee on phone Co., relative to the Wagner bill; to the Committee on Banking and Currency. Labor. DISPOSITION OF USELESS PAPERS 3525. By Mr. THOMPSON of Texas: Petition of citizens The VICE PRESIDENT laid before the Senate a letter of Galveston, Tex., protesting against passage of House bill from the Assistant to the Secretary of Labor, transmitting, · 5812, proposing compulsory medical treatment of all new­ pursuant to law, a list of files accumulated in the Office born infants in the District of Columbia; to the Committee of the Secretary which are not needed in the conduct of · on the District of Columbia. business and possessing no historical interest, and asking 3526. By Mr. l'READWAY: Resolutions adopted by the for action looking toward their disposition, which, with the House of Representatives, Commonwealth of Massachusetts, accompanying papers, was referred to a Joint Select Com­ urging legislation to promote the establishment . of unem­ mittee on the Disposition of Useless Papers in the Execu­ ployment insurance in the several States; to the Committee tive Departments. on Labor. The VICE PRESIDENT appointed Mr. WALSH and Mr. 3527. By the SPEAKER: Petition of the Boston invest­ BoRAH members of the committee on the part of the Senate. ment and brokerage houses regarding the National Securities BOARD OF VISITORS TO THE UNITED STATES MILITARY ACADEMY Exchange Act of 1934; to the Committee on Interstate and Mr. SHEPPARD. I ask that the announcement which Foreign Commerce. I send to the desk may be read. The PRESIDING OFFICER (Mr. BARKLEY in the chair). SENATE The announcement will be read, as requested. The legislative clerk read as follows: TUESDAY, APRIL 3, 1934 UNITED STATES SENATE, (Legislative day of Wednesday, Mar. 28, 1934) COMMITTEE ON MILITARY AFFAIRS, Washington, D.C., April 3, 1934. The Senate met at 12 o'clock meridian, on the expiration To the Senate: By virtue of the authority vested in me by the act approved of the recess. May 17, 1928, I hereby appoint Senators COOLIDGE, LOGAN, REY­ THE JOURNAL NOLDS, REED, and CAREY to represent the Senate Committee on Military Affairs on the Board of Visitors to the United States On motion of Mr. ROBINSON of Arkansas, and by unani­ Military Academy during the remainder of the Seventy-third mous consent, the reading of the Journal for the calendar Congress. days Thursday, March 29, and Monday, April 2, was dis­ MORRIS SHEPPARD, pensed with, and the J oumal was approved. Chairman Senate Military Affairs Committee. CALL OF THE ROLL PETITIONS AND MEMORIALS Mr. ROBINSON of Arkansas. I suggest the absence of a The VICE PRESIDENT laid before the Senate the fol­ quorum. lowing concurrent resolution of the Legislature of the State The VICE PRESIDENT. The clerk will call the roll. of New York, which was referred to the Committee on The legislative clerk called the roll, and the following Rules: STATE OF NEW YoRK, Senators answered to their names: IN SENATE, Adams Black Capper Costigan Albany, March 26, 1934. Ashurst Bone Caraway Couzens By Mr. Blumberg Austin Borah Carey Davis Bachman Brown Clark Dickinson Whereas it appears from a current newspaper article that there Bankhead Bulow Connally Dieterich has been discrimination against Negroes in a restaurant open to Barbour Byrd Coolidge Dill the public and located in the United States Capitol and tha~ Barkley Byrnes Copeland Duffy service of food therein has been refused to Negroes; a.net